When you fill out your initial pre-qualification application you will be asked for your employment history, monthly income, source of funds for closing and down payment and other pertinent information. Your pre-qualification will be based solely on your pre-qualification information. Once you have found a property and made formal application, the items outlined below will be required.
Verification Of Income
In order to verify your income, the lender may ask for the following (not an all inclusive list):
- Most recent pay stub
- Most recent two years W2’s
- Most recent two years complete income tax returns
- Verification of Employment and Income from the employer (this will be requested from the employer by the lender)
Verification Of Funds
All funds needed to complete the loan request will need to be verified. In order to validate assets available for the transaction, some or all of the following may be required:
- Most recent bank or investment company statements.
- Verification of funds sent directly to your bank/investment company by the lender
- 401k or other retirement statements
A credit report is used in determining credit qualification. Credit qualifications vary depending on the program you are applying for.
An appraisal will be required on most transactions to determine the current fair market value of the property. Appraisals are ordered from a panel of local licensed independent appraisers.
During the loan process, the lender will require that a title search be performed on the property. This search will reveal the legal description, the owner of record and any outstanding liens and/or encumbrances on the property. Liens are items such as property taxes, mortgage loans and judgments. Encumbrances may be road maintenance agreements, right of way and utility easements.