One thing about buying a house is that there is always a list or a series of lists-right? There is the wish list-the three bedrooms, 2 baths. 2 car garage, fenced yard list of features you really want in the new place. Then there is the packing list, and of course once you find the house and get an accepted offer-the to do list that comes with buying a home-inspections, obtaining insurance etc. After closing-it evolves into the household chore list-which is a bit more extensive than when you resided in the rental property. No more landlord to shovel the sidewalks and parking lot, mow the grass,and paint the trim. That's now on you.
But there is one more list that I want to talk about. It is the list of items that you will need to gather for your mortgage loan. The reason I mention this is because many people get caught up in the excitement of buying a home and begin packing-at once-before the new home is procured. And where do we begin when we are packing and sending items to charitable organizations? The items we think we will not need until we are moved. Which would be the contents of filing cabinets, the top cupboards etc. And that means that many times the financial documents that are needed for the mortgage loan get packed up and stashed in storage or at the bottom of a pile of boxes waiting to be moved.
Here is where I am going to tell you what not to pack! These items are essential to obtaining mortgage financing. If you don't have them-your loan will not be approved. There is no court of appeal-these items are essential so don't put them out of reach.
Here we go, this is what you will need:
W2's-the past two years
Tax returns-we don't always need them, but if we do, getting them from the IRS is a pain so don't pack them away.
(As an aside, tax returns and W2's are not interchangeable)
Pay stubs-30 days
Bank statements-60 days
Driver's license/social security card (The soc card is often put away somewhere since most people don't carry them any more. If you can't find it you can obtain verification of your number at the local social security office and that form will work .If you have no driver's license a military ID, passport, or state issued ID will work)
If you have had a divorce you will need your decree and property settlement as well as any child support or maintenance orders
If you had a bankruptcy in the past 5 years, you will need to produce your bankruptcy papers.
That is the short list-where we begin. Depending on the situation other documents such as marriage licenses to prove relationship, grade transcripts, diplomas and other odds and ends may be requested. But those are on a case by case basis. Does this sound like a lot of documentation? In order to prevent another mortgage meltdown the Consumer Financial Protection Bureau has set stipulations on the documentation that must be in loan files. So if you wish you can blame the government. Personally I think it is good business. Not good business to hassle any individual, but good business to ensure that mortgage loans are going to folks who can actually pay back the money. While everyone who wants a mortgage has every intention of making their house payments it is important that in reality, they can.
Tax season is upon us so if you are planning on buying a home this spring, now is a great time to pull those documents out and set them aside so they are ready when you make your mortgage application.
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