The Perfect Property

Buying Your First Home? 4 Documents You'll Need For The Loan

by Zachary Thompson

If you're finally ready to purchase your first home, you might not be prepared for the amount of paperwork that's going to be required. In the past, borrowers were able to obtain a home loan with little documentation to prove that they could afford the home they wanted to purchase. Those days are long-gone. Today, lenders require documentation on everything. The stack of paperwork you'll need to provide will be quite expansive. Here are four documents you'll need to provide before you can get approved for a home loan.

Previous Year's Tax Returns

Before you can purchase a home, your lender is going to require you to verify that you have the income you've claimed. To do that, they'll want to see your previous tax returns. Your tax returns will paint a complete picture of your past year's earnings. Most lenders will require you to provide at least two year's-worth of tax returns. However, to increase your chances of getting the loan you need at the rates you want, you should offer to provide at least three years-worth of returns.

Bank Statements

In addition to your past tax returns, a lender will also want to see your bank statements. Like the tax returns, most lenders will require two-full years of bank statements before they'll consider approving you for a home loan. One of the benefits of providing bank statements, is that they'll provide a full history of all the steady income that is deposited into your account. This is beneficial when you'll be asking the bank to consider child support payments as part of your qualifying income.

Recent Pay Stubs

While your tax returns provide proof of past income, your paystubs will show proof of your current income. As soon as you realize that you're going to be purchasing a home, you need to start saving all of your pay stubs. It's also a good idea to have your employer provide you with a proof of employment letter. The letter will verify your employment, as well as your current income.

Proof of Closing Funds

If you're going to be using funds from a third-party for your down payment or closing costs, you'll need to provide proof of those funds. This is particularly true if you plan on borrowing money from family members for your down payment.

Now that you're going to be purchasing your first home, you need to be prepared for the lending process. The information provided above will help you gather the documentation you'll need to secure a loan for your new home. If you have further questions or concerns about the lending process, be sure to speak to your realtor for more info.