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Your Mortgage Preapproval Checklist

Amelia Josephson
Your Mortgage Pre-Approval Checklist

To get preapproved for a mortgage, you’ll need a few documents detailing your income, assets and debt obligations. This helps banks and other mortgagees determine exactly how much they’re willing to lend you. Getting preapproved also helps you understand how much house you can afford, so you won’t get your heart set on a home outside your budget. We’ll walk you through this checklist. We can also assist you with finding a financial advisor who can guide you through the entire home-buying process.

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Mortgage Pre-approval Checklist

If you want to get preapproved for a mortgage, here is some of the paper work you’d absolutely need.

  • Copies of Identification – The bank or mortgage lender will want to see your government-issued ID. So providing copies of your driver’s license or passport is a must.
  • Copies of your Social Security card Do you remember where you put your Social Security card? If not, start doing some digging.
  • Pay stubs – You can provide proof of your income in the form of pay stubs. If you work for yourself, you can gather your profit-to-loss statement for your business. But if you’re covering your down payment with a gift, obtain a letter from the person who is providing it. Make sure it clearly states this person does not expect to be paid back.
  • Tax documents- You should gather your tax returns (form 1040s) and W-2 forms dating back for at least the last two years. If you’re self-employed, you can provide your Form 1099s. These documents will help give your lender a complete picture of your most recent income.
  • Bank statements – You should gather bank statements of all your accounts dating back to the past 60 days. So make sure you provide records of your bank accounts, savings accounts, money market accounts, certificates of deposit (CDs) and other banking products.
  • Retirement account statements – Even if you don’t plan on borrowing from your 401(k) to cover your mortgage down payment, you should provide statements of all your retirement plans dating back the past two months. The presence of these assets may increase your chances of getting preapproved. It tells the lender you have some assets in reserves as a last resort.
  • Investment account statements – Do you have a brokerage account or another taxable investment vehicle? If so, include statements for those too. That money is an asset that the lender will view favorably.
  • Records of your debt obligations: Your lender is going to take a magnifying glass to your income and debt obligations before you get preapproved for a mortgage. So be sure to have a record of all your monthly payments ready. Include rent, utilities, groceries, credit card debt, student loan payments, car payments, monthly bills for services like phone and cable and anything else you’re tied to.
  • Credit history: Your debt-to-income ratio will serve as a major factor determining whether you get preapproved. So gather recent statements for credit cards and any other interest-bearing debt you owe. If you don’t have a traditional credit history, you can provide documents like utility bills and documents of other regular payments. Your lender will look at your credit report, but it’s never a bad idea to review yours online for free.
  • Reference from your landlord – This one isn’t a must but it can help your cause if you have proof of your on-time rent payments a letter from your landlord saying you’ve been a reliable tenant. This kind of letter can also help with the co-op board approval process or convince a seller to accept your offer.

If You Already Own a Home, Add These Items

Your Mortgage Pre-Approval Checklist
  • Mortgage statements – If you already own a home, whether you’ve paid it off or not, you can include your mortgage statements as part of your preapproval application packet. These statements will show that you’re keeping up with your payments. If you still owe money on the home, the bank will use that information when calculating your debt-to-income ratio. That ratio helps the bank decide how much to lend to you.
  • Property tax bills – Your property tax bills on the home you own are an ongoing financial liability. Your property tax bill affects your ability to pay your mortgage and property taxes on a second home. For that reason, the bank will want to know how much you’re currently paying.
  • Real estate income documents: Maybe you’re making money from property you already own. Be sure to provide documentation of all real estate or rental income and the current market value of the property you’re generating this income from.

The Takeaway

To get preapproved for a mortgage, you basically need to provide detailed documentation proving your identity, income, assets and debt obligations. Any source of money puts you in good standing. The process may seem intimidating, but a mortgage preapproval saves you from several headaches. For starters, you know more or less what you can stomach. This helps you find a home you can likely afford.

Your Mortgage Pre-Approval Checklist

Home Buying Tips

  • Once you secure a mortgage, paying it off can be complicated. The mortgage is more than just a monthly payment. It’s built with different pieces. To help you get a grip on what you’re really paying for and how to pay it off on time, check out our mortgage calculator.
  • If you’d like some professional guidance, we can help. Our financial advisor matching tool connects you with up to three advisors in your area. It also gives you access to detailed profiles, so you can compare their qualifications before choosing to work with one.

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