Important Documents You Need to Get Before Buying a House

Buying a house can be quite complicated at times. One thing that takes a staggering amount of time is getting all the paperwork done. From income verification and copies of tax forms, you will surely find it hard to keep track of all of it.

But, there’s nothing to worry about as we have got you covered. Here we have stacked up a list of some important documents that you would need while buying a house.

 

When you submit an application for a mortgage pre-approval, you will be required to show the lender proof of income. The documents a lender could request may vary with every lender; however, some common documents a lender would need are:

All of these mentioned documents would help you prove that the claim you made about your income is true. Moreover, it will also provide the lender with insights into the sources of down payment.

 

How do you intend to pay your mortgage? And how much are you willing to pay every month? Your lender would want to know if you can make consistent payments or not. Also, the mortgage pre-approval amount will be based on your monthly income.

 

Notably, your lender can request you to show pay stubs, 1099s, or W-2s. In addition to that, the lender may give your employer a call for the verification of your employment. You can expect them to re-verify the employment some days prior to mortgage closing as well.

 

The lender would also want to know how much debt you are yet to pay. This would help them evaluate if you would be able to make payments on the current debt along with paying a mortgage.

 

Moreover, you may also be requested to show them divorce decrees and evidence of child or spousal support that you may owe, details on car loans or student loans, or any kind of bankruptcy paperwork.

 

A credit report usually has all of the information regarding your debts, collections, and payment history. This information is mainly used by credit bureaus for generating credit scores. The higher the credit score you have, the better.

 

The reason for pulling the credit score and report is to determine if you’re capable of repaying a loan or not. Notably, you won’t be able to see this document unless you ask for a copy.

 

Once your assets, income, debts, and credit score are verified, the lender will issue a pre-approval letter. This letter will state how much you can possibly borrow. Since the pre-approval letter will help set a home shopping budget for you, most real estate agents prefer to wait until you can get the pre-approval letter before they start showing you the properties.

 

Moreover, a pre-approval letter would also provide further verification of your financial information and credit score.