After all those years, John and Natalie finally found their dream home. They couldn’t wait anymore to move in, so they applied for a mortgage the very next day. But they discovered that they are short of one important document before the mortgage gets approved – Tax returns for the past two years. They requested for the tax returns from IRS but when they received it, it was too late; the lender already gave the house to another couple with completed documents. What a bummer! We are sure that the case of John and Natalie might ring a bell with some of you. Well, this quick guide will make sure that such a thing doesn’t happen again.
With all-time low mortgage rates and falling home prices, this is perhaps the best time to buy a home or refinancing one. But it is easier said than done. New Qualified Mortgage rules and tight credit standards have put brakes on the mortgage approval process. Needless to say, average homebuyers are having a hard time getting their mortgage applications approved.
Lenders have their hands full of borrower’s applications. Resultantly, the smarter lot of borrowers gets to bag the best deals. To stay at the top of lender’s preferred list of borrowers, you need to be proactive and have all the required documents ready before you even apply for a mortgage. This will shorten the turnaround time significantly and allow for a smoother transaction between you and your loan officer.
Here’s a quick list of all the documents you need while applying for a mortgage. Kindly note, if there are more than one applicants on one form, each will need to present the documents separately.
a) Employment Proof – Confirmation of current employment.
b) Income Proof – Working individuals need to present most recent pay stubs and W-2 statements for the past two years. Self-employed individuals need to present year-to-date profit and loss account and 1099 statements for the past 2 years. One also needs to disclose the source of additional income, if any.
c) Tax Returns – Transcripts of tax returns for the past 2 years. This is done by filling out and signing of IRS form 4506-T. Digging out your tax return in advance is really going to make the mortgage approval faster.
d) Assets Proof – It consists of bank account statement for the past 3 months and investment account statements for the past 2 months including stocks, bonds, mutual funds, life insurance and large deposits, if any.
e) Debts Proof – It includes current mortgage statements or home equity line of credits. One also needs to present his/her outstanding debts such as student loans, car loans, credit card accounts and other financial obligations, if any.
f) Gift Letter – This is needed if you are getting a monetary gift from your friends or family for your home.
g) Details of Additional Properties Owned – It includes copies of all leases, contact details of homeowner’s insurance agents and mortgage statements for all properties owned.
h) Credit Report – Most recent credit report
One thing you should always keep in mind is to make sure to disclose all your relevant financial details upfront to your lender. Misrepresenting or not disclosing critical information or not being able to present the required documents will only delay the process and take you one step away from getting your dream home. So, stay true, always.
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Of all the above documents, it’s the tax return that takes longest to be pulled out. The usual turnaround time of getting a transcript from IRS ranges from 30 to 60 days. It gets even more delayed at peak times of filing returns. At http://4506-transcripts.com/, we are dedicated to provide you the same transcript within 2 business days. When it comes to getting your transcripts faster, you can count on us!