Have you found the home of your dreams? Are you ready to take the leap and become a homeowner? Then a home loan is no doubt something that you have considered applying for. But just what information is required to apply for a home loan? In this article, we will discuss just that.
1. Your Credit Score
Your credit score is one of the most important factors in whether or not your home loan application will be approved. Your score lets a creditor know how risky it would be for them to lend money to you, and your likelihood of paying back any loan you are approved for. In addition, your credit history that goes hand-in-hand with your score will show a potential lender any unsettled accounts of yours and whether or not anything related to you has been sent to collections.
2. Proof of Income
Your proof of income can be a W-2, a collection of your most recent paystubs, tax return statements, et cetera. You will need these items in order to show a potential lender your overall financial state as well as how you plan to receive income moving into the future. This will show the creditor your ability to pay on your home loan and whether or not the home you are applying for is safely within your budget and means.
3. Bank Statements
In many cases, a potential lender wants to know that if an emergency arises you will have several months of mortgage payments set aside. Therefore, you may want to come prepared with bank statements that show any finances you have saved for just that type of scenario.
4. References and Renting History
While you may not always need this, especially if you and any co-signers you plan to use for your home loan application have a decent credit score, references and your renting history can only aid your chances of being approved. If you have rented a home you may want to list any previous landlords to back up the fact that you have paid your rent on time and been an individual worth trusting to make payments.
The bottom line is that your potential creditor wants to know that, if you receive a home loan, the amount of risk associated with you is low. Be sure to bring any information related to your assets and income, as stated above, any co-signer for your home loan application, and of course, your identification. Check with your local mortgage broker for more information.
