Documents Required for a Home Loan

To begin the process of buying a home, a potential home buyer must first fill out a disclosure form and an application. For first time home buyers, this process can be a bit intimidating. Once a lender has requested all of the verification forms, the potential home buyer may find the process somewhat overwhelming. However, if this is the second or third home the potential home buyer is purchasing, they should be familiar with the process. Depending on the loan, the lender will require a vast amount of paperwork from the potential homebuyer such as:

Credit history
Employment information
Recent bank statements

The reason a lender will want to collect these documents from the potential home buyer is because the lender will want to assess the potential home buyer’s current financial state to determine how much the potential home buyer will be able to afford. Horizon Lending Services, LLC works with the potential home buyer and the lender to make this process as smooth and exciting as possible.

Home Loan Lending Requirements

Once the potential home buyer application for a loan is approved, a mortgage underwriter will then go over the loan in detail and send it in for final inspection. Depending on the type of loan the home buyer is applying for, the underwriter’s task is to carefully review the debt-to-income ratio of the potential home buyer. In doing this, the underwriter will be able to determine if the loan chosen is the right loan for the potential home buyer and if he or she can afford to repay the loan back.

For the most part, the guidelines and eligibility requirements will differ from lender to lender. All lenders as part of their job, is to review a potential home buyer’s financial information. The following are some examples of what kind of documentation will be needed.

Copies of paystubs
Proof of income
W-2 statements for the previous two years
Tax returns for the previous two years

Proof of Assets

Gift letters explaining any gift money received from family or non-profit organization. These letters specify that there is no debt to be repaid
Documents providing information on any stocks, bonds or insurance equity
Proof of any debts the potential home buyer may owe
Lines of credit, car loans, student loans, or store credit

Personal History

12 months of cancelled checks for rent or utility bills to prove residence
Social Security Number
A diploma and transcript if the potential home buyer attended higher education in the past two years
Your home addresses for the previous two years

Verification of the Property

A copy of the final purchase agreement contract. You may need plans and specifications if it is a new construction loan
A legal description of the property the potential home buyer is buying. The borrower can get this from their real estate agent
Additional documents that may be required if applicable depending on the loan chosen