Don’t fret. This is merely a comprehensive list of possible documents you might need. Your actual documentation requirements will be explained by your Mortgage Consultant.

1. Pay stubs for the past 30 days showing YTD earnings W-2 forms for the past 2 years
2. Two most recent bank statements with all pages, or account #’s/ name of institution
3. Tax returns for the past 2 years if self-employed (all schedules including rental income)
4. Proof of any supplemental income, if applicable
5. Records of any past derogatory credit history that have since been paid off
6. Records of child support or alimony if being paid, if received it is customers option
7. Drivers License and Social Security Card, pursuant to the Patriot Act
8. Names, addresses and telephone numbers of employers for the past 2 years
9. Statements of current assets, such as Individual Retirement Accounts (IRAs), Life Insurance with face value, Certificates of Deposit (CDs), or stocks/bonds must be verified. If you have individual investment accounts, we need a current brokerage statement that shows the total funds available and your name/ social security number or account number
10. If renting, bring the name, address and phone of your landlord and your current monthly rent
11. If you have lived in your current address for less than 2 years, you will also need to provide information for previous addresses
12. Bring a signed copy of your fully executed sales contract and a copy of the earnest money check
13. If part of your down payment or closing costs will be from a gift, a signed letter from the donor stating that the borrowers don't have to repay the gift money
14. If self-employed, a profit and loss statement and balance sheet for the past 2 years, and possibly a letter from your CPA (ask your loan officer)
15. A copy of the divorce decree or maintenance agreement, along with any amendments and a 12-month payment history of alimony or child support payments if the payments are needed to qualify for the mortgage (if applicable). If you own rental properties, we will need tax returns along with a schedule of all real estate owned and the account number and address of the mortgage company that holds the mortgages. If the property is rented, a copy of the current lease.

Pre-qualification:

Getting pre-qualified is not the same thing as getting pre-approved. Pre-qualification simply states that the borrower qualifies for a loan based on some preliminary questions but does not commit to the mortgage lender to approve the mortgage. Midwest Capital Mortgage will still have to conduct a complete review of your financial situation, including your credit report, your income and employment history.

Pre-approval:

Pre-approval is a solid determination by the lender as to how much the homebuyer can afford based on factual information. Often this will be a maximum amount that the homebuyer can afford and it will be based on many factors that will be explained at a later time. We cannot stress enough the importance of a true pre-approval as it allows the homebuyer to understand their term, monthly payments, and an overview of the loan process. The pre-approval will help realtors to strengthen their client’s offers to potential sellers.

Pre-approval helps buyers to:

• Know the maximum amount you can borrow.
• Confirm your ability to qualify for a mortgage based on credit, financial and employment information.
• Strengthens your position to make an offer on a house. A seller will be more willing to accept an offer if the buyer is pre-approved and is informed of any unique structuring of the contract.
• Helps identify any special needs of the customer before they become an issue.

Borrowers are qualified on many factors, but the primary considerations are what can be referred to as the three C’s:

Credit
Capacity
Collateral

Credit is extremely important in the process, as this will determine the borrowers history when it comes to repaying debt. Lenders particularly look at the last two years history to determine the credit worthiness of a file.

Capacity is important because this entails the customer’s actual ability to repay the loan. This will be based on verifiable sources of income, employment and housing history.  In the case of stated income, the customer will tell us the amount of income to enter on the file because it cannot be verified in a conventional way. In the case of “No doc” loans, there will typically be no income or employment information listed on the loan application.

Collateral refers to a borrowers assets and real estate holdings. Assets and reserves are important because they will allow the borrower to continue making timely payments in the event of loss of income.

Shop for a mortgage within a 2 or 3-week period; when you apply for a mortgage, the lender requests a credit report and an inquiry of that request shows up on the report. All inquiries during a 2-week period only show as one inquiry. A couple of inquiries on a credit report are okay, but more can lower your credit score.

Do not apply for new credit or make major purchases, such as a new car, right before or during the time you apply for a mortgage. It is best not to incur any new debt before a home purchase or refinance.

Do not take money away from down payment savings to pay off debts with less than 10 months worth of payments. These debts don't count in underwriting for debt ratio purposes. This rule applies to installment loans only.