What documents do I need when purchasing a home?

The new year is under way and many homebuyers, first time or otherwise, are thinking about purchasing a home. With the holidays behind us and spring right around the corner, many new listings will be coming on the market. I have been finding in our local Denver metro market that homes in good condition and priced right are selling quickly, often getting multiple offers.

Since no document and stated income loans are now a thing of the past (thankfully), this article can help get you ready and make the loan process faster and easier. By being prepared, you will be ready to submit an offer and be more likely to get the best home available when you find it.

Have these items available when you are prepared to complete your mortgage application:

Proof of income
You will usually be required to show original pay stubs for the last 30 days.

Copies of your W-2 forms
These are required for each applicant on the mortgage. This will help your lender verify employment and income history.

Copies of asset information
This includes any accounts where money may come from for closing. You may need to provide statements for your savings, checking and 401(k) accounts; as well as investment records for any mutual funds or stocks.

Credit history
When you apply for a mortgage, it is necessary for lenders to pull your credit report to know how credit worthy (or risky) you are as a borrower. Be prepared to give your Social Security number and date of birth.

When the offer is written, the lender will need a copy of the signed purchase agreement and a copy of the earnest money deposit. The lender will also need to see that the home you are purchasing has clear title and that you have obtained homeowners insurance for the home.

With the recent credit crunch in the last couple of years, many lenders will verify and re-verify. It is not personal, they just want to make sure that you are fully prepared to carry a mortgage and have your debt to income ratios in order. That way, you will feel comfortable with your monthly payment and still be able to enjoy life outside your home without being "house poor."