The process of buying your first home can be a very exciting time for soon-to-be homeowners. However, the process can be overwhelming and a bit complicated because you want to be sure that everything will go smoothly without any problems. Besides searching and finding the perfect home, some other parts of the home buying process must be paid special attention to. One of the most important pieces is making sure that you have all the right paperwork and that it is filled out and signed by the proper parties. Because there are a lot of pieces of important paperwork involved, it is always a very good idea to start getting things in order before you even begin searching. The real estate market can be fast-moving, and you would hate to miss out on your dream home for some reason like wasting time getting your paperwork in order. The paperwork needed to buy a house can be broken down into three main categories: Mortgage, Offer, and Closing.
So before you even begin looking at homes, it is always a good idea to start the mortgage process so that you know how much you are pre-approved for to figure out your price range. Here are the documents that you will need when working with your lender for securing a mortgage.
- Tax Returns (at least one year, typically 2)- you will need to provide your tax returns for the prior two years (typically) with all pages and schedules attached. Lenders will look for any unreimbursed employee business expenses, self-employment business losses or signs of loan fraud like income that does not match your W2s.
- W2s (last 2 years)- your employee issues the W2, which is your wage and tax statement. Usually, lenders will ask for the two most recent W2s.
- Pay Stubs (last 2 with YTD earnings)- these pay stubs serve as proof of verified income and lenders will also look at year to date earnings as well, which is factored into the mortgage approval process.
- Bank Statements )- typically the last two months bank statements are enough, however, some lenders will require seeing three months of statements. Make sure to include all of the pages, even the blank ones.
- Asset Statements– stocks, bonds, mutual funds or retirement account statements are all necessary for the mortgage approval process. Make copies of the original statements.
- Debt Statements– all the documents and statements above tell how much money that you earn, the lenders will also consider how much debt you owe and what your debt-to-income ratio is. Monthly debt payments include mortgages, student loans, car loans, credit cards, child support and others.
- Copy of Driver’s License
- Credit Report
- Canceled Rent/Mortgage Checks– if you have been renting or a prior homeowner, the lender will ask to see the last 12 months of canceled rent/mortgage checks to see that they were paid on time.
- Pre-Approval Letter– this shows the amount that you have been pre-approved for by your lender and shows you are a submitting a credible offer.
- Sales Contract– if your offer is accepted, this contract will become binding, so work with your realtor to make sure that all necessary items are addressed. This could include items like sale price, terms of payment, seller’s promise to provide clear title, closing date, earnest money deposit, how taxes and utilities will be prorated, who will pay title insurance, survey, inspections and others, what type of deed will be granted, contingencies (financing and home inspection) and time limit for the offer to expire.
- Sales Contract
- Title and Insurance
- Driver’s License
- Deed– the document that transfers the title of the property from the prior owner to you.
- HUD-1 Statement– itemized list of services and fees charged to the borrower by the lender.
- Survey– this shows the exact property lines of the property you are about to purchase.
- Proof of Home Insurance
- Proof of Required Repairs
If all of this seems a bit overwhelming, that is completely understandable, especially for first-time homebuyers. The good news is that you will not be alone during the home buying process. You want to make sure you are working with an experienced and knowledgeable realtor from the very beginning, and they can help you every step of the way. Jeff Barchi is the most trusted name in real estate in the Phoenix area and has provided exceptional service for more than 17 years. Working with Jeff, he can answer all your questions like, “what documents do I need to buy a home?”
If you are just beginning the house-hunting journey, contact Jeff Barchi and let him help you find the home of your dreams. Whether you are looking for Scottsdale homes for sale or Phoenix homes for sale, get in touch with Jeff Barchi!