An Overview of the Loan Process
1. Organize Your Documents
A properly documented loan application makes your loan process go smoothly. This checklist will help you gather your paperwork.
The next step is gathering together your documentation.
- W-2’s for the previous two years
- Previous 2 years tax returns
- Most recent 2 paystubs
- Previous two years tax returns, including all schedules,
- YTD profit and loss statement.
- If you own rental property, provide recent rental agreements.
- Other income information, if applicable (child support, retirement, social
(Note: provide copies of all requested documents. Do not provide original documents.)
If you own rental property, provide recent rental agreements and tax returns for the previous two years, including all schedules.
To speed up the approval process, provide bank statements for the most recent two months, and recent statements for stock, mutual funds and IRA/401K accounts.
If you are requesting a cash out refinance, provide a letter explaining how you will use the refinance proceeds.
If applicable, provide a copy of your divorce decree and settlement agreement.
If you are NOT a US citizen, provide a copy of your green card (front & back). If you are NOT a permanent resident provide a copy of your H-1 or L-1 visa.
If any borrower has filed bankruptcy, provide the Discharge Notice, Filing and Schedule of Creditors.
If you are applying for a home equity line of credit or loan (second loan), also include your first mortgage note. (This should be with your closing loan documents.)
2. Get Pre-Approved
Getting pre-approved before you apply for a loan can help you understand how much you can borrow.
When buying a home, you may be pre-approved. You can be pre-approved over the phone or on the Internet in a few minutes. Pre-approval requires verification of your credit, income, assets and liabilities. It is highly recommended that you be pre-approved before you start looking for a home.
Being pre-approved will:
- Inform you of your maximum affordable home value, and save you from previewing properties outside your price range.
- Put you in a stronger negotiating position with the seller, because the seller will know your loan is pre-approved.
- Help you close quickly, since your loan is pre-approved.