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8 Documents You Need to Buy a Home

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  • Written on August 11, 2022 By Stanley Martin

Purchasing a new house is exciting! All the research and money you've saved to get you to this point should be applauded. You're ready to make the big purchase, so what do you need to have prepared? Our in-house experts compiled a list of documents you'll want to have on hand during those important meetings with your real estate agent, mortgage lender, and title company.

  1. Government ID: This may seem slightly obvious, but you will need identification documents at closing. This includes items like your driver's license, passport, or any other form of government ID. Did you know – the most common issue at closing is bringing in an expired driver's license? This is because there is often more than one person on the title, like a married couple. It's easy to forget that each title holder needs a valid ID, so make sure they are all current by the closing date.
  2. Pay Stubs: If you are applying for a mortgage loan, your mortgage lender will need to verify your income. Plan on showing at least 30 days of stable income. This will confirm that you can pay your mortgage each month.
  3. Bank Statements: Your bank statements are a pretty good snapshot of your financial footing. Lenders will use them to assess the funds going into and coming out of your accounts. You'll be asked to provide at least 30 to 60 days worth of transactions.
  4. Tax Documents: It's important to have at least two years' worth of tax returns ready to show your lender during the pre-approval process. These documents are another way to showcase your financial position as well as your financial stability.
  5. Proof of Employment: Depending on your start date, you may need to provide proof of employment. For most borrowers, your pay stubs will act as proof, but if you were recently hired and do not yet have the required number of pay stubs, your lender may ask for a letter from your current employer confirming your employment status.
  6. Credit Report:Your credit report chronicles your debts and payment history. It is used to generate your credit score and determine your willingness to repay your mortgage loan. Your lender should be able to obtain the credit report for you when they are creating your pre-approval letter. Just remember to ask them for a copy during the process.
  7. Proof of Additional Income or Debts: A significant part of the loan process is knowing your debt-to-income ratio. Your lender will need to fully understand your financial history to determine if you qualify for a mortgage loan and the amount of that loan. Suppose you have any additional income such as Social Security or disability payments. In that case, you will need to show proof of that. And if you have any outstanding loans like a student loan or credit card debt, your lender will need to know the balances and monthly payments for those accounts.
  8. Pre-Approval Letter:After you've submitted the previously listed documents to your lender, you will complete the pre-qualification process. Obtaining the actual pre-approval letter from your lender is the most crucial part of being "pre-qualified." Many real estate agents prefer clients to have a pre-approval letter before they view homes. Why? Because it ensures that the homes you view are ones you can afford, making the process of purchasing run more smoothly.

We get it, buying a home can seem like a lot of hard work. But with the right real estate professionals behind you and this handy list of documents to have prepared, you'll be more than ready for the big day. If you're a first-time home buyer, feel free to check out our other resources to help guide you on your journey, from researching the perfect home to signing on that final dotted line.