Need a Mortgage? Here's What You'll Need!
The hardest part of the home search journey is now under your belt - finding a home and getting your offer accepted(!) - and now you realize it's time to quickly move on that application for your home loan. What's next?
You and any co-borrowers will need to provide your lender with documentation to verify your employment history, credit-abiltiy and overall financial situation. Before completing an application, you’ll want to ensure you have these 6 things:
- W-2s (for the last 2 years)
- Recent pay stubs (covering the most recent 30 days)
- Complete bank statements for all financial accounts, including investments (for the last 2 months)
- Signed personal and business tax returns
- If self-employed, a copy of most recent quarterly or year-to-date profit/loss statement
- A copy of the signed Contract
Your lender may require more documents, depending on your circumstances and the type of mortgage for which you’re applying. Also, your lender will run your credit report as part of the process, after receiving permission from you.
Since interest rates fluctuate frequently, things can change between the day you apply for your loan and the day you close. If you want to protect yourself against rising interest rates, you might consider locking in your rate with your lender when you fill out your loan application via rate lock, also known as a rate commitment.
Of course, in today's high interest rate environment, if you believe that interest rates will decrease in the near future, waiting to lock your rate may make sense to you. In the end, it’s a personal choice when to lock your rate; it just must be locked prior to the lender preparing your closing documents.
This all said...our team HIGHLY recommends you get a mortgage pre-approval letter from your lender at the start of your home search journey. You will provide the documents outlined above at the start of your home search journey to receive a lender's tentative commitment in writing. Taking this step will also ensure that you know exactly what price range of a home you can afford.
If you're looking for mortgage provider recommendations, or seeking to understand the process a bit better, please don't hesitate to reach out. We're here for you.