Hey there, future homeowners and mortgage hunters! If you're on the exciting journey towards purchasing your dream home, you've probably heard about conventional loans. These loans are a popular
Conventional Mortgage Application Documents Needed
Dated: October 2 2023
Hey there, future homeowners and mortgage hunters! If you're on the exciting journey towards purchasing your dream home, you've probably heard about conventional loans. These loans are a popular choice for many, offering competitive interest rates and flexible terms. But, like with any financial adventure, there's a bit of paperwork involved. Don't fret, though—I've got your back with a rundown of the documents you'll need to secure that conventional loan and make your homeownership dreams a reality.
1. Proof of Identity and Income: The basics! Your lender will need to verify your identity and assess your ability to repay the loan. This means you'll need to provide your driver's license, passport, or another government-issued ID. Additionally, you'll need to show proof of income, including pay stubs, W-2 forms, and tax returns from the past couple of years. The goal is to demonstrate your steady income flow and financial stability.
2. Employment Verification: Lenders want to make sure you're not just borrowing money but can pay it back. So, they'll ask for pay stubs for last 30 days, to confirm your employment status and income consistency. If you're self-employed or have variable income, you might need to provide additional documentation like profit and loss statements. Have a second job, Social Security, or alimony? All that counts!
3. Credit History: Your credit score and credit history play a significant role in loan approval and interest rates. So, gather up those credit reports from the major reporting agencies. While you're at it, check for any discrepancies or errors that might be dragging down your score.
4. Asset Verification: Lenders want to know you have the funds needed for a down payment and closing costs. This involves sharing bank statements, investment account statements, and any other assets you plan to use for the purchase. It's all about showing that you've got the financial backing to commit to your new home.
5. Debt Information: Your lender will want to know about any outstanding debts you have, like student loans, car payments, or credit card balances. This helps them determine your debt-to-income ratio—a critical factor in loan approval. So, have those statements ready to go.
6. Property Information: The home you're eyeing needs to meet certain criteria set by the lender. You'll likely need to provide property details, such as the purchase agreement, property listing, and possibly an appraisal report to confirm the home's value. But, we know that you’ve already been pre-approved before you get to this point so general information on what time of home you’re looking at will do for now.
7. Gift Letters (if applicable): If you're lucky enough to receive financial help from friends or family for your down payment, you'll need gift letters. These letters confirm that the funds are indeed gifts and not loans.
8. Additional Documentation: Depending on your unique situation, there might be other documents required. These could include divorce decrees, child support documentation, or bankruptcy discharge papers. It's best to have a chat with your lender to ensure you cover all the bases.
Final Thoughts: Navigating the paperwork for a conventional loan might seem a bit overwhelming, but remember, it's all part of the journey to homeownership. Take a deep breath, gather your documents, and keep the end goal in mind—a place to call your own. If you're unsure about any specific requirements, don't hesitate to reach out to your lender. They're there to guide you through the process and make your dream of homeownership a reality.
Here are a few local lenders I love working with:
- Dennis Reed – Fairway Mortgage – 419-529-2160
- Adam Bracken – Equitable Mortgage – 330-466-4140
- Illya Boronka – Mechanics Bank – 419-524-0831
Once you get pre-approved we can start looking for your next home! 🏡🔑
Taylor Anderson, NextHome Next Stepp