Getting Preapproved for a Mortgage: The Top 5 Documents You’ll Need

mortgage preapproval document checklist

“Which documents do I need to get preapproved for my mortgage?” I get that question a lot. One reason is because there are at least seven different types of mortgage loans. Who knew, right?

Types of Mortgage Loans

The types of mortgage loans include:

  • Conventional – These are standard mortgages for borrowers with strong credit and 20% down payment.
  • FHA (Federal Housing Authority) – First-time homebuyers like FHA loans for two primary reasons. First, they can qualify with a lower credit score (minimum of 580). Second, FHA loans require a down payment of only 3.5%.
  • USDA (United States Department of Agriculture) — These loans also require zero down payment. However, they are only for eligible rural and suburban homes. These homes are generally outside a metro area. If your credit score is below 640 or if you have a nontraditional credit history, you can still qualify. However, you will have to meet tighter underwriting standards.
  • VA (Veterans Administration) – These loans are specifically for military veterans, service members, and spouses. They do not require a down payment or private mortgage insurance. VA loans also have lower credit and income requirements than conventional mortgages.
  • Job-Based Incentive – These loans are for public servants such as teachers, firefighters, police officers, and emergency medical technicians. Some of these programs – such as the HUD Good Neighbor Next Door program — offer discounts of up to 50% off the list price of the home. In exchange, the borrower must agree to occupy the home for at least 36 months.
  • Self-Employed – These are essentially conventional loans with requirements that allow self-employed borrowers to prove their business income. Lenders typically determine the loan amount based on your profits over the last few years.
  • Investment – These loans are specifically for buying properties you intend to rent out. In other words, you won’t be living in them. Interest rates are typically higher on these loans than on conventional loans by 0.5% to 1.0%.

Documents for Mortgage Preapproval

Considering each type of loan has a specific purpose, it should come as no surprise that each has its own documentation requirements. This article from houselogic.com provides a comprehensive list of documents you’ll need for each mortgage type. It’s a great resource! Be sure to click inside the article to get a printable PDF checklist of documents for your particular mortgage type. In summary, though, you will need at least the following:

  1. Current valid state/federal issued ID (such as driver’s license) or passport
  2. Pay stubs for the last 30 days
  3. Last two years of tax returns (if you’re attempting to get preapproved early in the year before you’ve filed your tax return, use your returns from the preceding two years)
  4. Last two years of W-2 forms (1099 forms if you are self-employed)
  5. Last two months of complete bank statements for all accounts (includes even pages that are blank or do not show transactions)

Prequalified vs. Preapproved

Curious about the difference between “prequalified” and “preapproved”? Curious why I ALWAYS recommend getting pre-approved?  See this blog article: “Mortgages: Prequalified vs. Preapproved”.

Let Me Help You Get Started!

If you’re looking to make a move in 2019, it may make sense to look at that sooner rather than later. Give me a call at 303-204-6494 – I’m always happy to help!

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