How often do people see a house they want, they try to submit an offer and the first response back is, “We need to see your bank’s preapproval letter”? In today’s market that could cost a buyer valuable time and when he finally gets it, the house is already under contract. As a rule of thumb it is recommended to have the following with you for your first meeting with a lender: 1. 2 years of W-2s, 1099s or tax returns (this shows you have stability in your income), 2. 3 months of bank statements with savings, checking, CDs (this demonstrates you have money for your down payment and closing costs), 3. Two of your most recent pay stubs (this shows you are still employed, generating income to make the payments on your loan.
Next, the lender will run your credit. This is really important, not just for the credit score, which does affect the interest rate, but also to catch any surprises in your credit report. Only recently the Justice Dept. disclosed that an entity from China hacked 150 million accounts of Equifax. So it’s better to find out and correct anything that might accidentally appear in your report that shouldn’t be there. There are many ways to correct unpleasant surprises and to do it in advance will avoid delays, especially right as you go into escrow! Read on for a checklist of items to have ready for each type of loan you may be applying for. Click here.