Home Buying Guide – Preparation of the Necessary Documents
Are you planning to buy a new house? Well that’s really great news. But before deciding to make the purchase offer, it is important that you gather all the documents that will be required in the purchase of a home. Having all the papers at hand decreases the chances of being rejected when you apply for a mortgage. They are very important as lenders rely on the information in your documents to determine your creditworthiness and ability to repay your loan.
If you are wondering what these documents are, please refer to the items below. The things mentioned are the usual documents required by the lenders for the mortgage application.
1. W2 forms: This is also known as the wage and tax statement. This is prepared by your employer. You should get a copy of this form that was submitted within the previous two years.
2. Copies of tax returns for the previous 2 years must also be prepared and submitted.
3. Bank Statements – Copies of your bank statement must also be submitted. It should reflect the transactions that were made during the last 2 months. Others claim that lenders require statements from the last three months.
4. Proof of Income – You must prove to your lenders that you are actually receiving income from your employer by submitting a copy of the most recent pay stubs issued to you.
5. A copy of the earnest money check must also be submitted. All you have to do is photocopy the issued check. This will then be used for accounting purposes to be used on closing day.
There will be other documents that are very necessary to push your seller to accept your purchase offer. Sometimes it is difficult to buy houses when there is competition in the market. Therefore, the technique is to show that you are very serious about making the purchase and, of course, you must also express your intention in writing.
If you are prequalified for the loan, the prequalification letter can also be presented to your seller to show that you have the ability to pay for the home. But before that, you must make a purchase offer to express your intention to buy. The purchase offer is very important as it describes your terms and the purchase price you are willing to accept.
Another document that will be required is also a disclosure from the agency. This is also important to show that you clearly understand the agent’s or broker’s role in the home purchase transaction. In this document, the real estate agent or broker will disclose who they are working for and who will pay their commission.
The documents required to purchase a home may vary depending on the lender’s requirements. They are standard on the mortgage application and must be completed before further processing can take place.
Now, do you see the importance of preparing the documents? So start building now before you jump in to buy a house. After all, it is to your advantage.
