Hello reader, this blog post will help you better understand the mortgage loan process and what will, and what may be required from you before and during the loan process when purchasing a home. The first thing to understand is that there are three main categories that mortgage companies will be looking at when taking a mortgage application to possibly work up a preapproval letter to eventually reach the end goal of getting you approved for your new home loan.

Let us investigate these three categories in a little more detail.

This is a pretty simple one as every mortgage company will need to pull a tri-merge credit report which consists of the three main credit bureaus (Transunion, Equifax, and Experian). This is to check for any major derogatory or negative items, confirm if you have qualifying credit scores or not to better help the lender put a plan together that works best for you, rather good or bad credit. These items are things like bankruptcies, foreclosures, delinquent federal or state debt, etc. as well disputed items. Most mortgage programs are looking for a score of at least 620.

You will need to show consistent income to qualify as well. The lender will be looking mostly at a two-year history. You will need to provide the last two years of w2’s/1099s and full tax returns as well as the last 30 days of your current paystubs. If you have recent retirement income you will need to provide your most recent award letters as well, and or your most recent deposits to your financial institution. If you are self-employed the lender will need to verify your business and will also need any business returns if applicable.

For this, your lender will be looking for the last couple of months of all bank statements, 401k/retirement statements, stock/bond, and other investment accounts (You will want to make sure you provide ALL the pages of these statements). The Lender will be looking for the funds that will be used for a down payment (some programs will require a minimum of 3%) and additional funds for reserves (these will be required at times to help with approval in certain circumstances).