Documents Needed for a Mortgage Preapproval
When it comes to buying a home, the process can be quite lengthy and even overwhelming if you walk into it blindly. If you’re serious about buying a home, there are certain steps that you need to understand and be prepared to take in order to get pre-approved for a mortgage. Lenders always ask for what seems like mountains of paperwork. It’s tedious, yes, but it’s also crucial to securing financing, and the payoff is worth it.
When you have mortgage pre-approval on your side, it automatically strengthens your offer. Sellers want to know that a buyer is serious, so they gravitate toward those who have already secured the necessary financing. Having this pre-approval is also beneficial to you, the interested buyer because you’re going to need that mountainous stack of paperwork for your official mortgage application as well once you’ve got a contract on a home. So, what all do you need in order to secure pre-approval?
Whether you’re self-employed or applying for an FHA or VA loan, here’s a look at what you’re going to need for each type of mortgage pre-approval:
Conventional Loan
For employed buyers who receive regular paychecks, W-2s, and you don’t plan to go through FHA, USDA, or any other incentive-buying program, you will need the following documents:
Proof of Identification (one)
- Driver’s license
- Passport
- Other state or federal-issued ID
Proof of Income
- Pay stubs (last 30 days)
- Federal tax returns (last 2)
- W-2s (last 2)
- Proof of additional income (e.g. second job, alimony, social security, etc.)
Financial Accounts
- Last two account statements (all accounts)
- Statements for all investment or retirement accounts
Property (if applicable)
- Settlement statement from previous home sale
Additional/Miscellaneous
- Previous landlord’s contact information
- Divorce or separation agreement, and/or property settlement agreement (if applicable)
- Official gift letter from your lender if family is helping with a down payment
- Letters of explanation for any collections, late payments, judgements or other damaging circumstances that might affect your credit history
FHA Loans
For those applying for pre-approval through the Federal Housing Administration, you will need the following documents:
Proof of Identification (one)
- Driver’s license
- Passport
- Other state or federal-issued ID
Proof of Income
- Pay stubs (last 30 days)
- Federal tax returns (last 2)
- W-2s (last 2)
- Proof of additional income (e.g. second job, alimony, social security, etc.)
Financial Accounts
- Last two account statements (all accounts)
- Statements for all investment or retirement accounts
Property
- Closing discloser for previous purchase (or HUD-1)
Additional/Miscellaneous
- Previous landlord’s contact information
- Divorce or separation agreement, and/or property settlement agreement (if applicable)
- Official gift letter from your lender if family is helping with a down payment
- Letters of explanation for any collections, late payments, judgements or other damaging circumstances that might affect your credit history
VA Loan
For those applying for pre-approval through a Veteran’s Administration home loan, you will need the following documents:
Proof of Identification (one)
- Driver’s license
- Passport
- Other state or federal-issued ID
Proof of Income
- Pay stubs (last 30 days)
- Federal tax returns (last 2)
- W-2s or 1099s (last 2)
- Proof of additional income (e.g. second job, alimony, social security, etc.)
Financial Accounts
- Last two account statements (all accounts)
- Statements for all investment or retirement accounts
Property
- Settlement statement from previous home sale (if applicable)
Additional/Miscellaneous
- Previous landlord’s contact information
- Divorce or separation agreement, and/or property settlement agreement (if applicable)
- Letters of explanation for any collections, late payments, judgments or other damaging circumstances that might affect your credit history
- Certificate of eligibility from the Veteran’s Administration
Investment Properties
If you’re planning to buy an investment property that will be rented out, you will need the following documents for pre-approval:
Proof of Identification (one)
- Driver’s license
- Passport
- Other state or federal-issued ID
Proof of Income
- Pay stubs (last 30 days)
- Federal tax returns (last 2)
- W-2s (last 2)
- Proof of additional income (e.g. second job, alimony, social security, etc.)
Financial Accounts
- Last two account statements (all accounts)
- Statements for all investment or retirement accounts
Property
- Settlement statements of recent home sales
- Recent mortgage statements for all currently owned properties
- Proof of insurance for all owned properties
- Current leases for all owned rental properties
Additional/Miscellaneous
- Previous landlord’s contact information
- Divorce or separation agreement, and/or property settlement agreement (if applicable)
- Official gift letter from your lender if family is helping with a down payment
- Letters of explanation for any collections, late payments, judgements or other damaging circumstances that might affect your credit history
Self-Employed & Business Owners
For those self-employed or business owners looking for mortgage pre-approval, you will need the following documents:
Proof of Identification (one)
- Driver’s license
- Passport
- Other state or federal-issued ID
Proof of Income
- Pay stubs (last 30 days)
- Federal tax returns (last 2)
- 1099s (last 2)
- Proof of additional income (e.g. second job, alimony, social security, etc.)
Financial Accounts
- Last two account statements (all accounts)
- Statements for all investment or retirement accounts
- Last two years’ 1099s
- Last two years’ Corporate, S-Corp, LLC or partnership tax returns
Property
- Settlement statement from previous home sale (if applicable)
Additional/Miscellaneous
- Previous landlord’s contact information
- Divorce or separation agreement, and/or property settlement agreement (if applicable)
- Official gift letter from your lender if family is helping with a down payment
- Letters of explanation for any collections, late payments, judgements or other damaging circumstances that might affect your credit history
- Last two months’ profit and loss statements
- Balance sheet (if applicable)
- Business license
With all of your documents ready, in-hand when you walk into your financial institution, you’ll be able to go through the mortgage approval process with much more ease. You’ll be prepared and won’t have to go through the stress of having to learn on-the-fly, trying to track everything down so that you can get down to business, and secure your home.
