When you’re ready to start shopping for a home, it’s good to come prepared with a pre-approval letter. Marilyn Lewis from NerdWallet states that “unlike a pre-qualification, a preapproval letter lends weight to your bid on a home, proving to sellers that you have the financial clout to stand behind your offer.” From bank statements to W-2 forms, we’ve made a checklist of the most important documents you’ll need to have on hand. Keep reading to find out more!

Employment Records and Income

Your income can be confirmed in a couple of different ways, some of the easiest forms being a tax return or a W-2 form. The tax return copy will need to be two of your most recent federal and state returns. As for your employment records, these documents may vary depending on your source of income:

• Salaried or hourly workers with a company: a W-2 form and recent payroll stubs can be submitted.
• Self-employed and independent contractors: may use their 1099 forms and income tax statements. Lenders may also require a Social Security Number to verify employer’s name and address, hire date, and/or credit scores.

Assets

Another part of the pre-approval process is organizing your list of assets. These records can be anything from bank statements to investment accounts. The more assets you can verify, the better chance you have at qualifying for a higher mortgage loan. Your lender will want copies of additional documents such as:

• Bank statements: a copy of statements for every account whose assets you’re using to pay off the mortgage with. Include blank pages of the statements.
• Investment statements: copies of IRA statements and investment account information for 401(k)’s, stocks and bonds, etc. Include blank pages of statements.

Debt

Monthly debt will also be used to prove you’re making payments to your loans and other balances. Lenders will want to get a comprehensive list of your monthly debt payments and the following information along with them:

• Auto Loans: Loan balance and proof of payments, even if it’s the minimal amount
• Student Loans: Remaining balance with the loan company’s name and address
• Mortgage: a copy of the most recent statement with loan balance, account number, lender’s name and address, and monthly payment
• Credit Cards: Copy of payments to each card and remaining balance

Quick Tip: If you do not have a credit history, you can still show proof that you’re making monthly payments with paperwork showing utility bills or other regular payments.

Conclusion

Our pre-approval list features a few of the records you will need to be approved for a loan. However, further documentation may be needed to qualify. To get in touch with a professional loan officer, contact American Mortgage Resource, Inc. Our experts can walk you through the process so you know if you’re qualified for a mortgage loan. For more information, visit our website today!