What documents do you need for a mortgage pre-approval?
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Before shopping for a home, it’s a good idea to get mortgage pre-approved. While not required, it will help you budget for the purchase of a home, strengthen your offer to purchase, and prepare for the official mortgage application later.
There is a stack of documents needed for mortgage pre-approval, which a lender will use to check your financial health.
Find out what documents are needed to start shopping for your dream home sooner:
- Income verification
- Debt statement
- Proof of assets
- Other documents
Why is this important: Verifying your ID helps the lender verify your identity and prevent fraud.
Everyone on the home loan will need to show government issued ID. Acceptable forms of identification may include:
- Driving license
- Social security card or individual tax identification number (ITIN)
- Identity card issued by the state or the federal government
2. Income verification
Why is this important: Lenders use these pre-approval documents to review your income for the past two years and verify your ability to pay off the mortgage. The documents you need depend on where you collect income from.
If you work for an employer, it should be relatively easy to get these pre-approval documents:
- W-2 forms from the last two years
- Pay stubs for the last 30 days
- Last two bank statements
- Personal tax declarations for the last two years
- Your most recent year-end pay stub if your earnings include overtime or bonuses
For the self-employed and independent contractors
Self-employed borrowers do not receive W-2 forms or pay stubs from an employer, so they will need to produce the following pre-approval documents to show that they have earned a stable income for at least the past two years:
- Tax returns for businesses and individuals for the past two years
- A copy of current state or business licenses, if applicable
- IRS Form 4506-T, which allows lenders to access your tax records
- An income statement
- A review
- Asset account statements, such as retirement or investment accounts
- Any additional income, such as Social Security or disability
For owners and investors
If you rent an investment property, rent payments from your tenants may count towards your income. This can help you qualify for the new mortgage.
For documentation, you will need to provide a current lease showing the amount of the rent.
Credible’s pre-approval process is faster than most – it only takes a few minutes – and can help you easily compare pre-qualified rates online from all of our partner lenders.
Check out: How long does it take to get pre-approved for a mortgage?
3. Debt statement
Why is this important: During the pre-approval process, the lender will calculate your debt-to-income ratio. To get an accurate reading, they’ll need to see your most recent billing statements for any loans or credit cards with a balance.
Your DTI ratio helps the lender determine if you will qualify for the mortgage and how much you can afford.
A lower DTI ratio is desirable, but the requirements vary depending on each type of loan. Here’s what mortgage lenders typically want to see:
|Type of loan||Frontal DTI||DTI back-end|
|FHA||31% to 33%||43% to 45%|
|Virginia||N / A||41%
(but lenders are free to go higher)
Look for your most recent statements if you have any unpaid debts, which may include:
- Auto loans
- Student loans
- Other types of installment loans
- Tax privileges
- Credit card statements
Learn more: 10 Ways to Pay Off Your Debt Quickly
4. Proof of assets
Why is this important: These pre-approval documents show the lender that you have enough money to cover the down payment, closing costs, and cash reserves.
Lenders will want to consider the following assets when you apply for your pre-approval:
- Bank statements: Two months of bank statements for each account whose assets you will use for the loan
- Retirement and brokerage accounts: Two most recent retirement and investment account statements, such as IRAs, 401 (k), and CDs
5. Other documents
Why is this important: If you are relying on other sources of income or have a special financial situation, you will need to present documents to support your mortgage pre-approval.
Here are some examples of other documents a lender might request:
- Rental history: If you’ve rented out your home, you’ll need to show rent payments for the past 12 months – usually in the form of voided checks – along with your landlord’s contact information.
- Divorce decision or court decision: If alimony and child support payments make up a large portion of your income, you will need to show a copy of your divorce decree and / or relevant court orders.
- Bankruptcy and foreclosure: After certain negative credit events, you may need to meet a waiting period before you can take out a new mortgage. If you’ve filed for bankruptcy or foreclosure in the past few years, ask your lender about the waiting period and the documents you need for a mortgage pre-approval.
- Deposit Gift Letters: In some cases, borrowers can use the gift funds for down payment or cash reserves. The person giving you the money will likely need to provide bank statements showing where the money came from. Then they will have to sign a letter stating that the money is not a loan. Depending on the lender, this may not be required for pre-approval, but it will be part of the documents needed for a mortgage loan.
Credible makes it easy to get a pre-approval letter from our partner lenders, and it only takes a few minutes.
|How long does it take?||1 to 3 days||3 minutes|
|Credit check||Difficult credit draw
(negative impact on your credit)
|Soft credit draw
(no impact on your credit)
|Online process||Usually minimal; instead handled via an in-person visit to a branch or a phone call with a licensed loan officer||100% online|
|Compare multiple lenders?||No, visit multiple lenders to receive multiple pre-approval letters||Yes, pre-approved by several lenders at the same time|
|Several pre-approval letters to make additional real estate offers?||No, you must submit another request to the lender for a new pre-approval letter||Yes, instantly generate additional letters with a personalized loan amount|
Ready to be pre-approved through Credible?