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Mortgage Pre-Approval: What You Will Need Depending on the Type of Loan You Seek

Getting pre-approved for a mortgage can be daunting, but it’s a critical step in the home buying process. Most agents recommend obtaining mortgage pre-approval because it strengthens your offer. Sellers like to know that the buyer has already secured financing. In addition, this preliminary work will pay off because you’re going to need the same paperwork for your mortgage application once you have a contract on the home you decide to purchase.

Below, you will find a checklist for each type of mortgage pre-approval.

Conventional Loan Documents 

If you’re employed and get regular paychecks, plus a W-2 every year, and you’re not going through FHA, USDA, or an incentive-buying program, these are the documents you need to apply for mortgage pre-approval:

  1. Identification (one of these will need to be presented in person): Driver’s license, passport, or other state or federal-issued ID
  2. Income: Pay stubs (last 30 days), last two federal tax returns, last two W-2s, and proof of any additional income (second jobs, social security, alimony, etc.)
  3. Accounts: Last two statements on all bank accounts, statements for all investment and/or retirement accounts
  4. Property: Settlement statement from previous home sale, if this is applicable
  5. Additional documents: If applicable to your situation, you will need to provide contact information for your landlord for the last two years, a divorce decree, separation agreement, and/or property settlement agreement. Also, if a family member will be helping you with your downpayment, you will need to provide a gift letter (your lender will have a form for this). In addition, you will need a letter of explanation (LOE) for any late payments, collections, judgements, or other derogatory items that appear in your credit history.

FHA Loan Documents 

These are the documents you will need if you’re applying for mortgage pre-approval with the Federal Housing Administration:

  1. Identification (one of these will need to be presented in person): Driver’s license, passport, or other state or federal-issued ID
  2. Income: Pay stubs (last 30 days), last two federal tax returns, last two W-2s or 1099s if applicable, and proof of any additional income (second jobs, social security, alimony, etc.)
  3. Accounts: Last two statements on all bank accounts, statements for all investment and/or retirement accounts
  4. Property: Closing disclosure (or HUD-1 if the sale took place before Oct. 3, 2015) for previous purchase
  5. Additional documents: If applicable to your situation, you will need to provide contact information for your landlord for the last two years, a divorce decree, separation agreement, and/or property settlement agreement. Also, if a family member will be helping you with your downpayment, you will need to provide a gift letter (your lender will have a form for this). In addition, you will need a letter of explanation (LOE) for any late payments, collections, judgements, or other derogatory items that appear in your credit history.

Documents for Buying and Investment Property

If you are purchasing property that you plan to rent, these are the documents you should have ready when applying for mortgage pre-approval:

  1. Identification (one of these will need to be presented in person): Driver’s license, passport, or other state or federal-issued ID
  2. Income: Pay stubs (last 30 days), last two federal tax returns, last two W-2s or 1099s if applicable, and proof of any additional income (second jobs, social security, alimony, etc.)
  3. Accounts: Last two statements on all bank accounts, statements for all investment and/or retirement accounts
  4. Property: Settlement statement on any recent home sales, recent mortgage statements on all properties you own, proof of insurance for all properties you own, and current leases for all rental properties you own.
  5. Additional documents: If applicable to your situation, you will need to provide contact information for your landlord for the last two years, a divorce decree, separation agreement, and/or property settlement agreement. Also, if a family member will be helping you with your downpayment, you will need to provide a gift letter (your lender will have a form for this). In addition, you will need a letter of explanation (LOE) for any late payments, collections, judgements, or other derogatory items that appear in your credit history.

Self-Employed or Business-Owner Mortgage Documents 

If you are self-employed or own a business, these are the documents you need for the mortgage pre-approval process:

  1. Identification (one of these will need to be presented in person): Driver’s license, passport, or other state or federal-issued ID
  2. Income: Pay stubs (last 30 days), last two federal tax returns, last two 1099s, and proof of any additional income (second jobs, social security, alimony, etc.)
  3. Accounts: Last two statements on all bank accounts, statements for all investment and/or retirement accounts, last two years’ Corporate, S-Corp, LLC, or partnership tax returns
  4. Property: Settlement Statement from previous home sale, if applicable
  5. Additional documents:If applicable to your situation, you will need to provide contact information for your landlord for the last two years, a divorce decree, separation agreement, and/or property settlement agreement. Also, if a family member will be helping you with your downpayment, you will need to provide a gift letter (your lender will have a form for this). In addition, you will need a letter of explanation (LOE) for any late payments, collections, judgements, or other derogatory items that appear in your credit history. You will also need to provide the last two months’ profit-and-loss statements, a balance sheet (rules vary by state), and your current business license.

VA Loan Documents 

If you are seeking pre-approval for a Veteran’s Administration home loan, these are the documents you will need:

  1. Identification (one of these will need to be presented in person): Driver’s license, passport, or other state or federal-issued ID
  2. Income: Pay stubs (last 30 days), last two federal tax returns, last two W-2s or 1099s if applicable, and proof of any additional income (second jobs, social security, alimony, etc.)
  3. Accounts: Last two statements on all bank accounts, statements for all investment and/or retirement accounts
  4. Property: Settlement statement from previous home sale, if this is applicable
  5. Additional documents:If applicable to your situation, you will need to provide contact information for your landlord for the last two years, a divorce decree, separation agreement, and/or property settlement agreement. Also, if a family member will be helping you with your downpayment, you will need to provide a gift letter (your lender will have a form for this). In addition, you will need a letter of explanation (LOE) for any late payments, collections, judgements, or other derogatory items that appear in your credit history. You will also need to provide a certificate of eligibility (COE) from the Veteran’s Administration, which may require one or more of these documents, depending on your situation:
    1. Form DD-214, certificate of release or discharge
    2. Statement of service from the adjutant, personnel office, commander, or higher headquarters if still on active duty
    3. Form 26-1817 or form 21-534 for surviving spouses, plus form 1300, report of casualty, or death certificate

USDA Loan Documents 

If you’re applying for a U.S. Department of Agriculture Loan, you will need these documents to seek pre-approval:

  1. Identification (one of these will need to be presented in person): Driver’s license, passport, or other state or federal-issued ID
  2. Income: Pay stubs (last 30 days), last two federal tax returns, last two W-2s, and proof of any additional income (second jobs, social security, alimony, etc.)
  3. Accounts: Last two statements on all bank accounts, statements for all investment and/or retirement accounts
  4. Property: Settlement statement from previous home sale, if this is applicable
  5. Additional documents: If applicable to your situation, you will need to provide contact information for your landlord for the last two years, a divorce decree, separation agreement, and/or property settlement agreement. Also, if a family member will be helping you with your downpayment, you will need to provide a gift letter (your lender will have a form for this). In addition, you will need a letter of explanation (LOE) for any late payments, collections, judgements, or other derogatory items that appear in your credit history. You will also need to complete and submit these forms and documents:
    1. Form 410-4: Uniform Residential Loan Application
    2. Form 3550-4: Employment & Asset Certification, a separate form needs to be completed and signed by each applicant
    3. Form 3550-1: Authorization to Release Information, a separate form needs to be completed and signed by each applicant
    4. Form 4506-T: Request for Transcript of Tax Return, a separate form needs to be completed and signed by each applicant
    5. Documentation of child care expenses for dependents 12 or younger, if applicable
    6. Life insurance policy
    7. A current school transcript for any household member that is a full-time student 18 years of age or older
    8. Annual medical expenses for applicants 62 years of age or older, or with a disability (to be considered for a deduction in household income)
    9. A written explanation of two years employment history, including an explanation of gaps.

Job-Based Incentive Loan Documents

Incentive-based programs, such as the Good Neighbor Next Door, which provide mortgage assistance for public servants such as teachers, fire fighters, and police officers have their own criteria. If you are seeking one of these mortgages, you will need these documents for pre-approval:

  1. Identification (one of these will need to be presented in person): Driver’s license, passport, or other state or federal-issued ID
  2. Income: Pay stubs (last 30 days), last two federal tax returns, last two W-2s or 1099s if applicable, and proof of any additional income (second jobs, social security, alimony, etc.)
  3. Accounts: Last two statements on all bank accounts, statements for all investment and/or retirement accounts
  4. Property: Settlement statement from previous home sale, if applicable
  5. Additional documents: If applicable to your situation, you will need to provide contact information for your landlord for the last two years, a divorce decree, separation agreement, and/or property settlement agreement. Also, if a family member will be helping you with your downpayment, you will need to provide a gift letter (your lender will have a form for this). In addition, you will need a letter of explanation (LOE) for any late payments, collections, judgements, or other derogatory items that appear in your credit history.