If you are a first time home buyer, you may be wondering what will be expected of you to purchase a home. It used to be much more flexible to get approved for a home loan, but now there are more regulations, and because of that, you will need to show more documentation and proof to get the loan. However, being prepared can be one of the best things to speed up the process and improve your changes of getting approved for the loan. Here are some things you should be prepared to bring in when you try to get approved for the loan.
1. Bank Statements
One of the first things that people are surprised to learn is that they need to bring in their bank statements for the last couple months before they apply for the loan. This is because the lender wants to see just how much you have in savings and how you spend your money; it will help them to determine that your figures and numbers you are giving them are correct. Many people tend to exaggerate the numbers when apply for a loan, which does them no good, and the bank statements don't lie.
2. Tax Returns
Another thing you should have prepared is your last two years' worth of tax returns. This will help to show how much money you make each year and how much you can reasonably afford in a home. You will probably be asked to bring in pay stubs and W-2 forms from your employer, but if you are self-employed you won't have those, so you will need to have two years' worth of tax returns.
3. Gift Letters
If any of your down payment is being gifted, you will need to have gift letters from the gifter saying that they are giving you the money and none of it needs to be paid back. In addition, the gifter will also have to provide a bank statement showing that they have that amount to give.
4. Student Loan Documents
Lastly, if you have any student loans, you will need to have documentation stating how much you owe, how much your payments are, and that your loan is in good standing before you can get a home loan. Talk to your student loan officer; they should have mortgage documents ready to give you.
By knowing what you need to bring in, you can be prepared for your home loan.