| Like most people, you will probably wait until submitting | | | | information) |
| a purchase contract on a home before applying for a | | | | Pre-qualifying vs. Pre-approval If at all possible, it is best |
| mortgage. By then, not only will you know the specific | | | | to begin the loan approval process before you find the |
| property you want, but also how much you need to | | | | home of your dreams. Otherwise, you may hit a |
| borrow. At that point, the lender will require that you fill | | | | roadblock when you apply for a mortgage and the |
| out a loan application and reveal specific information | | | | application is denied. If the seller has other buyers |
| about your current and past financial situations. | | | | waiting, or needs to sell quickly, you may lose your |
| The following checklist is a good place to start for | | | | chance for that particular property. |
| gathering the information you will need: | | | | There are two ways to help avoid this scenario: |
| Original purchase contract (the loan officer will make a | | | | 1.) Become pre-qualified for a loan: All you need to do |
| copy and return the original to you) | | | | is speak to a lender, who—based on asking you |
| Copy of earnest money (deposit) cancelled check | | | | some questions about your finances—offers an |
| Employment history details | | | | opinion of the loan amount you are eligible to borrow. |
| Last two years’ W-2 forms | | | | The lender doesn’t ask for any supporting |
| Last two years’ income tax returns | | | | paperwork to confirm what you say, and can change |
| Paycheck stubs for past 30 days | | | | his or her mind when you come back to apply for a |
| Verification of secondary income (for example, | | | | loan. There’s no charge for pre-qualification. |
| investment accounts, bonuses, a part-time job, child | | | | 2.) Become pre-approved for a loan: This process is |
| support or social security income) | | | | more complex and sometimes involves a fee. The |
| Assets: Account numbers, balances and branch | | | | lender will want information about your employment, |
| addresses | | | | income and debts to prove that you are a good risk. |
| Checking | | | | Obviously, a lender’s pre-approval letter carries |
| Savings | | | | more weight with a seller than a pre-qualification letter |
| Stocks/bonds (current market values) | | | | because it is proof of your buying power on paper. |
| Debts: Account numbers and addresses | | | | Being pre-approved gives you an advantage when |
| Auto loan(s) | | | | you’re among several buyers pursuing a |
| Boat loan(s) | | | | property. |
| Student loan(s) | | | | Pay off other loans. |
| Credit card | | | | If at all possible, consider paying off any high-interest |
| Other | | | | loans before applying for a mortgage. The more |
| Explanation of any credit problems (for example, | | | | debts—like car loans or credit card |
| previously declared bankruptcy, excessive credit card | | | | balances—that appear on your mortgage |
| debt) | | | | application, the smaller the loan amount the lender will |
| Divorce or separation documents (if you receive or | | | | be willing to offer. |
| pay alimony or child support) | | | | Don’t pull a Pinocchio! |
| Landlord’s name and phone number (if renting) | | | | Never inflate your income or lie about employment |
| Disposition of present home (if you already have a | | | | dates. Not only is it illegal to falsify documents, |
| home, do you plan to sell it or rent it out?) | | | | it’s also a federal offense! And lenders can |
| Person who will give lender access to lender’s | | | | usually catch people who lie or greatly exaggerate |
| appraiser (name and phone number) | | | | information on their applications. If you lie, you will most |
| Your check for appraisal, credit report and/or loan | | | | likely get what you were trying to avoid all along, a |
| application fees (your lender will provide the cost | | | | denial for your loan. |