Better Prepared People, Walk Out With Better and Faster Results

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Prequalifying for a mortgage is a step that has almost become a necessity these days.  As the market continues to be a soft one, where buyers definitely have the upper edge, there is definitely some buying competition out there.  One way to have an extra edge is to show up with a prequalifying letter from your mortgage lender.   What do you need to take with you to the lender when seeking prequalification?

Two, Two and Two

Most lenders require two years of tax returns, two years of business tax statements and two months of bank statements.  If you are not self-employed, then instead of the business tax statements, it would be the previous two months’ paystubs.  As mentioned in the video, some mortgage lenders require just 30 days of bank statements and things can change here and there from one lender to the next.

Be prepared to asked for additional information – in fact, if at all possible, take whatever possibly relevant documentation that you feel may help you to demonstrate your ability to manage a mortgage and your financial viability.  This could mean evidence of other liquid assets, reporting other forms of income that may or may not be showing on the previous years’ tax returns, or anything else that might be useful.  You will need to provide your driver’s license at the time of applying for a mortgage prequalification too.

Full and Complete Documentation

If you provide the bank with incomplete documentation, it will only end up delaying your prequalification process.  When submitting tax documents, be sure to include the entire tax return, with every schedule, worksheet and attachment that was sent in to the IRS.  This can serve to avoid the need for a 4506t audit, which would only further delay the process – either now, or down the line.

Similarly, be sure to provide official bank statements rather than something pulled from the Internet.  It will be helpful when the statements clearly indicate that you are the owner of the account.
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All in all, the entire process can be a long and drawn out one especially in light of recent mortgage processing guidelines tightening.  As long as you are prepared to provide the lender whatever information may be necessary and are willing to be patient if it takes longer than expected at times, you can be on your way to owning a home, despite being an independent contractor or self employed person!