Home Loan Application Requirements
Updated January 1, 1 . AmFam Team
Are you ready to buy your own home? This is such an exciting time — and before you know it, you’ll be elbow deep in moving boxes. But before that can happen, you’ll have to arrange for a mortgage.
Getting pre-approved for a home loan not only gets the ball rolling, but it can give you an advantage if you are in competition for a property. So what paperwork do you need to apply for a mortgage? We’ve got a handy checklist that will help you start the process.
Salary statements. Most lenders want to see your income for the past two years. Plan on bringing copies of your W2s or 1099s to show proof of income.
Other income. Do you get regular payments from other sources? If you receive disability checks, alimony, account dividends or any other payments, bring copies of these statements or checks.
Savings, stocks and other assets. Plan on bringing statements if you’ve got money tucked away in a savings account, stocks or another type of investment. Your mortgage lender wants to get an overall impression of your assets.
Tax returns. Your lender will typically want to see your tax returns for the previous two years.
Rent receipts or copy of mortgage statement. If you currently rent then the bank will probably want copies of your rent receipts for the past year or your landlord’s contact information. If you own your home, you’ll want to bring your most recent mortgage statement.
List of debts. Your bank will be very interested in any current loans, credit card balances and other debts you owe. This is a critical part of their assessment so it pays to be accurate and thorough.
Driver’s license and SS#. Your lender will need to verify your identity and will probably take a copy of your driver’s license — so keep it handy. You’ll also have to provide your social security number.
New home information. If you already know what home you want, you should bring all the information you have on that home. If you don’t have a home in mind, that’s okay — you can still get pre-approved for a mortgage.
Proof of insurance. If you’ve got a home in mind and you’re moving right into the mortgage process, you’ll be expected to prove you have, or are ready to have, insurance on the home. Connect with your American Family Insurance agent (Opens in a new tab) — they’ll be happy to begin that process for you.
As an added tip — your lender will check your credit report. While you don’t have to bring a copy of your report with you, it’s a great idea to review it well in advance to make sure it’s accurate. Mistakes sometimes happen and fixing them can delay the process.
When you’ve been pre-approved, ask for a letter from your lender to show to realtors when you make a home offer. This can serve as an advantage and help you close on the home of your dreams.
Once you’ve found that home and are moved in, you may want to reconnect with your American Family Insurance agent (Opens in a new tab) to review your homeowners insurance. Often the initial policy is designed to satisfy mortgage requirements but not give your new home the full protection it deserves.
This article is for informational purposes only and based on information that is widely available. This information does not, and is not intended to, constitute legal or financial advice. You should contact a professional for advice specific to your situation.
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Typically, student loan debt doesn’t prevent you from getting a mortgage. The biggest thing to note is that student loan debt does influence your debt-to-income ratio, which is a factor lenders consider before giving you a loan. It can also affect the interest rate you pay on your mortgage.
Buying a house with defaulted student loans
If you’ve defaulted on your student loans, it’ll be more difficult — but not impossible — for you to get a mortgage. Because defaulting negatively affects your credit score, lenders will be less likely to want to give you a loan or will charge a much higher interest rate on a loan.
Getting a home loan with student loan deferment
If you’ve deferred your student loans, this usually won’t affect your chances of getting a mortgage. Just be sure to consider how the future estimated payments will factor your debt-to-income ratio. Some types of mortgages may reject applicants with deferred loans, so do your research on the different types of mortgages before shopping.
Should You Pay Off Student Loans Before Buying a House?
Buying a house is expensive, there’s no doubt about that. It can seem smart to hold off on house shopping while you still have student loan debt, and it can be even more difficult to save for a house if you’ve got a high debt-to-income ratio. But if you have enough income to handle the payments for both, you may want to consider investing in your first home.
Signs You Should Pay Off Student Loans
When considering whether to pay student loans or save for a house, there are a few factors that can help you decide if paying off your student loans should be a priority.
Your debt-to-income ratio is too high
If the amount of money you bring in monthly or yearly is almost the same as the amount of money you pay out in debts — like student and car loans or credit cards — it may be best to pay down your debt before buying a house.
You’ve defaulted on your loans
Defaulting on your loans has a severe negative impact on your credit score, which tells lenders that you’re a bigger risk to take on. Work on improving your credit score before shopping for a mortgage.
You’re struggling to make payments
If you feel like you’re living paycheck to paycheck or struggling to make payments on your loan every month, it’s best to hold off on saving for a house. Need help keeping track of your student loan payments? Try our student loan payment tracker to get organized.
You haven’t saved for a down payment or emergency fund
Before you start picking out which houses you want to tour, you should take a look at your savings. If you don’t have enough for a 5 to 10 percent down payment or enough as an emergency fund for home expenses — like a broken dishwasher or damaged roof — take more time to put money away for your first home.
