Must-Have Documents Every Home Buyer Must Have
Buying a home might seem overwhelming, but with the right preparation you can enjoy a smooth and stress-free process that helps you purchase the home of your dreams. Gathering all of your must-have documents is one of the most important components of home buying preparation. Make sure you have all of the following documents ready as you begin your search.
Current Pay Stubs and W2s
First and foremost, your mortgage lender needs to see your income in order to consider your application. If you receive pay stubs, you should have at least the past month to provide, but if you’re self-employed or use other sources of income, expect to show 1099 forms, direct deposits, and other means of proving your income amount.
Federal Tax Returns
Federal tax returns offer a full and uninhibited financial story. Expect to hand over the past one or two years’ worth of tax returns to your mortgage lender. Your tax returns will be cross-referenced with your other documents to ensure everything is accurate and that you do indeed have the resources needed to buy a home.
Bank and Asset Statements
Buying a home involves a full look at all of the assets in your name, including your bank account, retirement funds, insurance policies, and anything else of importance. Your lender hopes to see that you have enough “emergency money” to function as reserve mortgage payments in the event of an unexpected financial problem.
Credit History and Written Statements
No home can be purchased without a full evaluation of your credit history. Any blemishes – such as a past foreclosure or auto repossession – will require a formal explanation. Your written explanations will help your lender evaluate if you are too much of a risk to receive a loan. One-time unavoidable circumstances are sometimes forgiven.
Gift Letters
Lenders don’t want to see money emerge from nowhere. If you have received money as a gift to help you afford your down payment or loan, the gifter needs to provide a written confirmation that the money was granted as a gift, not a loan. This documentation must list the gift amount, date, and the person’s relationship to you.
Title Insurance
Before you close your purchase, it’s also essential to have title insurance. Title insurance may not be required by your lender, but it protects your newest real estate investment in the event of a problem with the title of your home. Call Benefit Title Services, LLC at (800) 237-9190 to learn more.
