Beginner’s Guide to a Hassle-free Home Loan Application
Obtaining home loan can be challenging, especially for first time home buyers. Having a checklist handy can help such buyers enjoy a smooth home loan application process and avoid any frustrating delays. As there are a number of documents required to process your loan, getting them ready beforehand makes the process quick and easy. Here is a checklist of some standard documents required for almost every home loan. Read on.
1. Form W-2, Wage, and Tax Statement
The W-2 form is proof of your annual wage and the amount of taxes withheld from your paycheck. It is a form filed by an employer for each employee from whom
● Income , social security, or medical tax was withheld
● Income tax has been withheld
Every employer is liable to send W-2 forms to employees and the Internal Revenue Service (IRS) at the end of every year.
2. Pay Stub
Today, pay stubs are available in various forms such as Electronic paychecks, payroll cards, or payroll warrants, among others. When applying for a home loan, lenders usually ask for your most recent pay stub. Some may even ask for pay stubs for three consecutive months.
3. Financial Transactions
Most Recent Bank Statement: Account summary of financial transactions occurring in a given period of time on your active bank account.
Consolidated Account Statement: A single account statement for all your portfolios across all financial schemes and mutual funds.
Individual Retirement Account (IRA) Statement: IRA statement gives a variety of tax advantage for retirement savings in the U.S. Ask your lender whether you get any tax benefits on IRA when applying for home loan.
Make sure you bring all pages of each statement mentioned above.
4. Tax Return for Self-employed applicants
If you are self-employed or earn income from commissions, you need to submit your federal taxes for the last two years.
5. Eligibility Certificate if you are a Veteran
If you are Veteran, along with above mentioned documents, you also need to provide lenders with a certificate of guarantee and a DD Form 214(Certificate of release or discharge from Active Duty) to qualify for VA loan.
6. Other Miscellaneous Documents
● The estimated net proceeds from the sale of your home, if applicable
● Your homeowner’s insurance agent’s contact details along with an authentica phone number
● Complete copy of any bankruptcy papers, including the discharge
● Divorce decrees or separation agreements, if applicable
● Lease agreements on any rental properties
● Letter of explanation for any gaps in your employment
● Your social security card and driver’s license
The Bottom Line
Whether you are looking for home loans in Texas or any other state, knowing the right approach can make your loan application process ten times easier and faster. Daunting home loan application processes require following a checklist of important documents required during the application. Hope this brief guide makes your loan application process a breeze.