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by Charlene

It wasn't that long ago, when you applied for a mortgage loan, you could get a loan approval providing little to no documentation. The sub-prime mortgage crisis has been blamed on those liberal lending policies and as a result, lenders have tightened up their lending and underwriting guidelines. In today's climate you will have to provide the following in order to qualify for most mortgage products.

Let's begin with documentation that you will need in order to purchase a home:

1) Purchase agreement or Sales Contract signed by both the buyer and seller. This will provide the lender with some valuable information about the home you are purchasing. Along with the purchase agreement, other documentation, includes but is not limited to: disclosures, termite inspection report, home inspectors report, and if you are purchasing a condo, the condo association's bylaws.

2) Appraisal of the property that you are purchasing.

3) Income Documentation - lenders will require that you provide copies of the previous 2 years W-2's, along with recent pay stubs for the last month. This will help the lender determine if you are relying on overtime pay, if it is consistent.

If you are self employed, you will need your last two year's income tax returns, both federal and state and a year to date profit and loss statement. You will also be required to provide a letter from your accountant or a business license.

If you are disabled and collecting Social Security, you should be prepared to provide copies of letters written by doctors, and/or insurance companies. You will also need to document the amount of money you make each month which can easily be done by keeping a copy of your checks. The certification letter from the Doctor and Insurance Company will help the lender determine how long you are eligible for benefits.

If you have income from a pension, have a copy of your award letter handy.

If you get child support or alimony, you can count it as income if you have a court order or divorce degree and can provide proof that the payments are being made. You can do this by making copies of the checks and keep bank statements that show that the money is regularly deposited. If you have been ordered to pay child support or alimony, you must disclose this as they are considered debts and can affect your Debt to Income Ratio's.

Have copies of the last 3 months of bank statements, savings/checking.

If you have assets such as C.Ds, savings accounts, 401k's or bonds, have recent statements from banks

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