You’ve decided to buy a house in Charlotte, and you’ve heard that it’s best to get financing pre-approval before you even begin house hunting. That’ good advice for two reasons. First, you will know exactly what price range is within your reach and thus save a lot of time and frustration. And, second, if you’re pre-approved, sellers will take you more seriously and will likely be more willing to enter into genuine negotiations. But before heading off to the bank, there are certain documents you need to have for pre-approval in Charlotte.
1. Proof of Employment and Income
Obviously, you will have to show a lender that you are employed and that your income is sufficient for you to make the monthly mortgage payments. The kind of documents you need to have for pre-approval in Charlotte will depend on your employment situation and how you get paid. In every case, though, you’ll probably need to provide copies of the previous two years’ income tax returns, both federal and state. Beyond that, you will need:
Salaried and wage earners – Copies of the last few pay stubs and at least the most recent two years’ W-2 forms, as well as records of overtime and bonuses.
Self-employed individuals (independent contractors and freelancers) – Profit-and-loss statements and the last few years’ Form 1099. This also includes sole proprietors, partnerships, and S-corporations.
If you have any, you will also need to provide proof of real estate income. For rental property, you will have to provide market value of the property and proof of rental income.
2. Records of Assets
Another of the documents you need to have for pre-approval in Charlotte is a listing of assets. For every bank account (checking, savings, money market, and so on) you will need copies of at least 60 days’ worth of statements. In addition, you’ll need the statements for the past two months for all investment accounts – for example, CDs stocks and bonds, and IRAs. In addition, you should be prepared to provide the latest quarterly statement (which shows the vested balance) for any 401 (k)s.
3. List of Monthly Debt Payments
Of course, a lender will want to know how much you pay out each month to cover debts. So you’ll have to provide official records of monthly debt-payment obligations like car loans, other mortgages, student loans, and credit cards. The lender will want you to provide the name and address of each creditor, along with account number, loan balance, and minimum payment.
Also, if you’re currently renting, you will likely have to provide rent-payment receipts for the past twelve months. You should also be ready to provide landlord contact information for probably the past two years.
4. Records of Other Expenditures and Financial Events
Still, other records among the documents you need to have for pre-approval in Charlotte are those that document certain life-event expenditures. For example, if you’ve been divorced, you’ll need to be prepared to provide court orders for alimony and child-support payments. And if you have declared bankruptcy or been through a foreclosure process, the lender will need to see the relevant documents.
And here’s a final thought. Lenders will often question you about how you intend to fund the down payment on the house. So keep in mind that you may have to show proof of the sources of money for this purpose.
Getting pre-approved for financing depends in large part on the documents you need to have for pre-approval in Charlotte. Having done that, then you can embark on your house-hunting journey.