When you know you are going on a trip or on vacation, you make a list, shop for whatever essentials you might need to make your trip more comfortable, check off items as you pack your suitcase, and then sit back to enjoy the rewards your early preparations have afforded you. Ironically, though, when planning the purchase of a house, many do not follow this same pattern of preparation as they begin their journey towards buying this precious asset.
Going from house to house searching for the style and layout you prefer is only one part of home shopping. The second part, which really should be the first step taken prior to making appointments to see the homes available for sale, is getting your documents in order in preparation for applying for mortgage financing you might need in order to purchase the wonderful home you eventually find.
I created a mortgage application checklist to assist anyone thinking of purchasing a home in the near future, or even for those who have started but put off preparing their necessary paperwork in preparation for a mortgage.
- Two years of most recent tax returns, all schedules (business returns as well for the self-employed)
- W-2s (two most recent years) and one month’s current paystubs
- If renting, copies of most recent 12 months of canceled rental checks
- Employment history (past two years) including name, address, and phone number of employer as well as present contact person there. If self-employed or more than 25% income comes from bonus or overtime, add last two years of tax returns with all schedules and business returns. All lenders are requiring a 4506 form to be signed, which also gives them permission to match your tax returns submitted to the tax returns on file with the IRS.
- Three months of most recent bank statements — all pages, no matter how insignificant — showing enough assets for down payment, closing costs, and some cushion (banks do not want to envision you living off PB&J sandwiches after you clean out all your assets). If you are utilizing gift funds, a copy of proof of funds from an account of your gift source must also be included. All large deposits over $1,000 must be explained!
- Debts — names, addresses, account numbers, balance, and monthly payments of any debts for which you are presently liable.
- Social security numbers, as well as a copy of your photo ID
In addition to the above items, when you submit an application to a lender, an executed contract of sale will also be necessary as well as all information for buyer and seller attorneys and other representatives.
Preparing your documentation in advance makes for a smoother and happier transition in the home-purchasing process. Anyone who needs assistance is welcome to contact me for further information about the mortgage application process.
Anessa Cohen lives in Cedarhurst and is a licensed real-estate broker (Anessa V Cohen Realty) and a licensed N.Y.S. loan officer (FM Home Loans). She can be reached at 516-569-5007 or via her website, www.AVCrealty.com. Readers are encouraged to send questions or comments to anessa@AVCrealty.com.