5 Documents Required To Get Pre-Approved

5 Documents Required To Get Pre-Approved

In some cases lenders will require extra documents but these are the standard documents that they will require. Lenders want to see that your income is steady, you can cover your debt, you're credit worthy, and have enough cash for a down payment and a few months of living expenses reserved. They find this out by requesting and reviewing the following documents. 

- Most Current Paystubs (30 Days)

- Two Months of Current Bank Statements.

- Copy of Driver's License.

- Two Years Recent Tax Returns (All Pages)

- Most Recent Quarterly Statement for Retirement/Investment funds.

Mortgage Requirements

Down Payment: Varies depending on the loan type.

- Conventional Loans = Minimum 3% down payment (20% is most common).

- FHA Loans = Minimum 3.5% down payment.

- VA Loans (Veterans) = Typically no down payment requirement.

Credit Score:  Varies depending on the loan type.

- Conventional Loans = Minimum 620.

- FHA Loans = Minimum 580 requires 3.5% down payment. 500 - 579 requires 10% down payment.

- VA Loans (Veteran) = No minimum requirement.

Employment: Lenders look for steady income, they focus on the last 2 years of employment. People who changed jobs a few times will have to explain the changes and gaps in income.

Self-employment: Lenders require 2 years worth of personal and business federal tax returns. Getting approved may be more difficult if you are self employed but if you have clean finances it can still be done easily.

Debt to Income Ratio (DTI): Divide your total debt by your income.

- Conventional Loans = 45% max DTI.

- FHA Loans = 43% max DTI.

- 41% max DTI.

In conclusion, even if you are not ready to purchase a home at the moment, it is a good idea to speak to a lender to figure out how far you are from being able to afford a home. There are many factors that decide how much you can get approved for so evaluating your financial profile as soon as possible is a great way to stay ahead and plan accordingly. The home buying process is a lengthy process and although this is an early step, it is one of the most crucial.

If you are interested in getting connected with a lender (commitment free) feel free to contact me and I will connect you with a professional that can help you plan accordingly. It is never too early to plan... no question is a stupid question!

Herson Richiez

(954) 829-6073

Herson@BridgestoneRE.com