You’ve found the perfect home: two stories, a nice backyard for the dog, and a white picket fence. Now that you’re ready to buy, you need to know what information you will need to provide as part of your mortgage application.
Once you have been pre-qualified for a loan and have a ratified contract, you should be prepared to provide the following:
- Details of purchase: How much you plan to borrow, your down payment, and funds to close from a documented source.
- Monthly income: This category encompasses various income sources, including non-salary earnings like investment returns or rental income. However, you will need to provide evidence of consistent income. Alimony or similar payments can also be considered.
- Job information: This section primarily addresses traditional employment, often requiring verification from your employer. If you’re self-employed, be prepared to provide additional details, including income documentation. If there are gaps in employment, be prepared to explain.
- Monthly housing expenses: This includes costs such as taxes, HOA fees, and homeowners’ insurance for the new property.
- Credit history: This section of the application scrutinizes your financial past, including any history of bankruptcy, outstanding liens or legal claims against your assets, and your current debt obligations, all of which play a crucial role in evaluating your creditworthiness. The primary information source is a credit report.
- Net worth: Your net worth represents the overall value of your assets minus your liabilities. Assets encompass items such as bank accounts, investments, and real estate. Liabilities encompass debts, loans, credit card balances, leases, alimony, and child support obligations. Mortgage applications often necessitate disclosure of these figures, including the specifics of your accounts, loans, and credit cards.
A mortgage application serves as the lender’s means of assessing your creditworthiness and deciding whether to extend a loan. While it may seem daunting, maintaining well-organized financial records can give you a competitive edge and lead to a much smoother process.
Mary Wright is a mortgage loan officer for F&M Trust.
