Posted by Peggy Farber on 3/13/2019

Many first-time home buyers are worried about all of the documents and information they’ll have to gather when applying for a mortgage. If you’re anything like me, you’re probably dreading having to dig through the five places that these documents might be. Fortunately, the process is now somewhat streamlined thanks to lenders being able to collect most of your information digitally.

In today’s article, we’ll talk about the documents you’ll need to collect when you apply for a home loan so that you feel prepared and confident reaching out to lenders.

Documents needed to pre-qualify

Before going into applying for a mortgage, let’s talk about pre-qualification. There are three types, or in some cases steps, of approval with most mortgage lenders: pre-qualification, pre-approval, and approval.

Pre-qualification is one of the earliest and simplest steps to getting pre-approved. It gives you a snapshot of the types and amount of loans you can receive. Pre-qualification typically doesn’t include a detailed credit analysis, nor do you need to provide many specific details or documents.

Typically, you’ll fill out a questionnaire describing your debts, income, and assets, and they will give you an estimate of the loan you might qualify for. Might is the key word here. Your pre-qualification amount is not guaranteed as you haven’t yet provided official proof of your information.

Documents needed for pre-approval

Getting pre-approved for a mortgage entails significantly more work on the part of you and your lender than pre-qualification. First, the lender will run a credit analysis. You won’t need to provide them with any information for this step, as they’ll be able to automatically receive the report from the major credit reporting bureaus. However, it’s a good idea to check your report before applying to make sure there aren’t any errors that could damage your credit.

Now is where the legwork comes in.

You’ll need to gather the following documents to get officially pre-approved or approved for a mortgage:

  • W-2 forms from the previous two years. If you are self-employed, you’ll still need to provide income verification, usually as a Form 1040, or “Individual income tax return.”

  • Two forms of identification. A driver’s license, passport, and social security card are three commonly accepted forms of identification.

  • Pay stubs or detailed income information for the past two or three months. This ensures lenders that you are currently financially stable.

  • Federal and State income tax returns from the past two years. If you file your taxes online, you can often download a PDF version that includes your W-2 or 1040 forms, making the process of submitting tax and income verification much easier.

  • Personal contact information. Name, address, phone number, email address, and any former addresses which you’ve lived in the past two years.

  • Bank statements from the previous two months. Also, if you have any assets, such as a 401K, stocks, or mutual fund,  you’ll be asked to include those as well.

  • A complete list of your debts. Though these will likely be on your credit report, lenders want to ensure they have the full picture when it comes to how much you owe other creditors and lenders.





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Posted by Peggy Farber on 5/3/2017

There are certain home disasters most of us would prefer not to think about. A house fire, a flood, or even a break-in are all some of a homeowner's worst fears. But being prepared for the worst is always the best choice in the long run. One of the most important things people lose in home disasters are their vital documents. If your documents are lost in a fire it will take a lot of time and money to replace them all. There are two main ways to insure the security of your documents: physically and electronically. However, neither method is 100% secured. Just as some safes can be broken, so can some electronic storage systems. In this article, we'll cover the documents you should secure and the latest and best ways to secure them.

What to secure

There are few things that are irreplaceable. Since most agencies you'll deal with in your life have your information backed up on their computer systems you probably can rest assured that your information is safe there. But for your own convenience and wallet, it's a good idea to secure the following documents and files:
  • Social security cards
  • Passports
  • Birth certificates
  • Insurance papers
  • Copies of wills
  • Legal papers
  • Vehicle titles
  • Hard drive with family photos, home movies
  • Medical information (doctors, prescriptions, etc.)

Buying a safe

Even if you tend to back up all of your documents in a secure place online, it's still a good idea to own a safe. Servers can crash and files can be hacked. Plus there are certain items that you can't back up online. Spare keys to your home, vehicles, and safety deposit boxes are all important items for your safe that won't take up much room. Similarly, family jewelry or heirlooms are also priceless additions that should fit nicely. When buying a home safe there are a few things to consider. Safes can range from under a hundred dollars to several thousands of dollars depending on factors like their size and security capabilities. You should look for a safe within your budget that is both fire and water resistant, but is also a practical size. If you're only protecting some documents and keys, you won't need a huge safe that will be difficult to move if need be. A benefit of a large, heavy safe is that it becomes difficult to steal from your home to break open elsewhere.

Protecting your data digitally

There are two ways of digitally security your items. One option is to use a flash drive and then keep that flash drive in a safe place (why not in the new safe you just purchased?). The benefit of a flash drive is that they are small and can hold huge amounts of data--multiple years of tax papers, for example. For an added layer of security on your flash drive, buy one with encryption capability. What's encryption?  Encryption is a method of securing data by making the information unreadable to those without the key. There are several types of encryption and many ways of encrypting your data online. Another, simpler option for securing your data online is to use cloud storage. Google Drive, iCloud, and Dropbox are all common cloud storage systems that incorporate encryption. However, not all cloud storage systems are created equally. Some are better for security, others are designed to be convenient and user-friendly. Whichever storage service you decide to use, it's important to be smart with your passwords. Make them complex, unique, and change them frequently to ensure the safety of your data.