Home Loan Preapproval Paperwork: A Few of the Documents You'll Need

Home loan preapproval is convenient and allows you to know the home price range you can afford to buy. When you arrange for your home loan preapproval the lender will inform you which documents you should bring along with you.   The list below is a few of the common documents required by any lender:

Home Loan Preapproval Documents Needed

If they do not provide you with a list of necessary documents ask for one. In these economic times the list has become longer than it was in the past. Here are the most common documents that are requested by most home loan preapproval processes.

  • Bank Statements for the most recent 3 months - if you have more than one bank account be sure to bring along statements or passbooks for all accounts.  Also, bring all pages, lenders will not accept statements that do not have all pages.
  • Investments - Money Market Accounts, Stocks, etc. If you have money invested with various institutes or in different investments, make sure you bring documentation for each of the investments to your home loan preapproval appointment for the most recent three months. 
  • W2 statements or 1099 income statements for the previous 2 years
  • Pay stubs for proof of income for the most recent 30 days
  • If you are self-employed, tax returns for the most recent 2 years.
  • Social Security Card
  • Drivers License

Remember this is a standard list needed for home loan preapproval. Your lender may not require all of these items and they may require additional items not on this list.  It is important to ask the lender what they require for home loan approval documents, before your appointment date to save you time.

Why Home Loan Preapproval Requires Income Proof

The bank needs to know how much you make in order to determine the amount mortgage payment you are eligible for.  Furthermore, the amount of income determines the size of the mortgage you can be preapproved for.  Your bank statemenst show your reserves and are also important to your lender because it shows your spending habits..

Your Credit Score and its Role in Your Home Loan Preapproval

Your credit score is another important part of the equation when determining how much money your home loan preapproval will be for.  Your credit score predicates your loan to value, rate, and other important terms of your loan.

Home loan preapproval is convenient and takes all the guesswork out of what you can afford to buy. Make an appointment with your broker or lender and bring the documentation above to be informed on what you can buy.