For most sellers, it’s fully expected that buyers will have pre-approval from a lender before they start negotiating. However, you should also know that a mortgage lender will always ask for things like proof of assets and documentation relating to your income and employment.
In this article, we take a quick look at what you will need to provide for your mortgage lender:
What Will My Mortgage Lender Ask For?
If you need mortgage approval, it’s necessary that you provide certain information and documentation to a mortgage lender. These requirements are non-negotiable for a mortgage lender and the only way they can reduce the risks associated with granting a loan. Here are some of the most common requirements that your mortgage lender will require to get started:
- Proof of Income – You will need to provide copies of your recent wage statements. These statements should illustrate the amount earned to date and proof of any other type of income.
- Proof of Assets – You will need proof that you have investments or money in the bank at the very least. It’s important to note that you must have enough money for the downpayment and also funds in reserve to minimize risk.
- Good Credit – Lenders will ask that you have a good credit score and this often needs to be above 650 to apply for a mortgage. That said, if you have a credit score above 760, you will likely be offered lower interest rates by the lender. In case you might have a lower credit score, it’s likely the lender will require a bigger sum with regard to the down payment.
- Employment Verification – Lenders will always seek to ensure that you have stable employment before agreeing to lend any money. They will ask for pay statements and also contact details for your employer so they can verify that you work there. If you are self employed, you will need to provide additional documentation about your business and income. In short, your lender just wants to make sure that you can continue to repay this loan in the long term and that your employment status is unlikely to be affected. Also, your lender will usually require that you provide at least two years of documentation/statement with your application.
- Misc Documentation – Every lender will ask for your social security number, signature and drivers license. These details will enable the lender to check your credit score and also feel satisfied that you are providing sufficient documentation or proof to support your application.
Summary: Requirements for Mortgage Approval
Your mortgage lender will ask for proof of income and employment and official documentation to verify your identity. Your social security information is just as important and these details will allow your lender to pull a credit report and assess your suitability for a mortgage. As already mentioned, you will need mortgage approval before placing any bids on a house and the more open or forthcoming you are with your mortgage application, the smoother you should find the process. To speak to a salary-based loan officer, contact City Creek Mortgage today.