If you are thinking of applying for a mortgage, it’s a good idea to start preparing these documents.

• Tax returns

• Pay stubs, W-2s or other proof of income

• Bank statements and other assets

• Credit history

• Gift letters

• Photo ID

• Renting history

1. Tax returns

Mortgage lenders want to get the full story of your financial situation. You’ll probably need to sign a Form 4506-T, which allows the lender to request a copy of your tax returns from the IRS. Lenders generally want to see one to two years’ worth of tax returns will generally give mortgage lenders the full story of your financial situation. They will make sure your annual income is consistent with your pay stubs and they remain consistent through the year.

2. Pay stubs, W-2s or other proof of income

Keep two months of pay stubs handy to show a record of your current earnings. Self employed, freelance and those that have other sources of income (such as child support) may need to show your lender proof through 1099 forms or other bank records.

3. Bank statements and other assets

Lenders like to see several months worth of reserve mortgage payments in your account just in case of an emergency situation. This is all part of assessing your risk profile. Investment assets as well as life insurance will help them determine if you are a good candidate for a mortgage. They will also see if your down payment has been sitting in your account for a few months.

4. Credit history

Your credit report will help assess you as a borrower. Any blemishes such as a short sale or foreclosure may need to be explained, so you should be prepared to write a statement explaining any negative items on the report. A habitual delinquency on the report is usually a red flag to lenders.

5. Gift letters

Any financial help from friends and family toward the purchase of your home will need a written confirmation the money is indeed a gift and not a loan. The documentation should list their relationship to you as well as the amount of the gift.

6. Photo ID

A photo ID such as a license will need to be provided to show proof of who you are.

7. Renting history

If you have been renting for a while, many lenders might ask your landlord to provide documentation such as rent receipts showing that you paid your rent on time and that you have not skipped any payments.

Documents such as these allow the lender to assess what they can and cannot do with a very high level of certainty.

Following these simple tips will make your home buying journey much less stressful. Contact us at Metronet Realty for all your concerns and questions regarding home ownership.

718-644-8460