While presenting a contract to a Seller only requires a basic loan preapproval, a lender requires extensive documentation from a Buyer to actually process a new home loan upon contract acceptance. Want to get ahead of the game? Begin to compile these documents at the beginning of your house hunt!
As inventory is currently at a historic low in St. Louis, often times a Buyer has to write a contract on the very same day it is listed or it is gone within hours! This process doesn't leave Buyers with a lot of time to think or act. Beginning to compile the documents required for verification of employment and income prior to writing a contract will save you a lot of time and headache. You will be thankful that you did so after you find "the one", when focus is needed on important inspections and move-day details.
Below is a basic overview of the documents required of a 2014 Buyer per Andy House of PHH Mortgage (formerly Coldwell Banker Mortgage). Depending on the complexity of the transaction, additional documents could be required.
Last 2 years W-2’s:
If using college education as an alternative, a copy of the diploma and official transcript is necessary.
Last 2 months bank statements:
All pages are required- if the statement says 1 of 5, all 5 pages in required.
Last 2 months/quarterly investment account statement:
Same as above.
If paid income by Social Security:
Must provide the most recent award letter and proof of 2 months of income received on the bank statements.
If paid a pension or retirement:
Must provide a copy of the pension award letter and must have 3 years of continuation of the pension in order to count it.
Must provide the last 2 years of tax returns. All pages and schedules are required and must be signed and dated.