Mortgage loans are not as simple as regular personal loans, approval is more complicated because there are always higher amounts involved. Thus, when applying for a mortgage loan, there are several documents and proofs that you will need to show in order to get approved. Though each lender is different and thus, has different requirements for approval, there are some basics or guidelines that you should follow to be prepared for the application and as the old saying goes: better more than less.
Mortgage Loans For Previous Tenants
If you have been renting before and you are obtaining special terms for tenants, you will need to show proof of this fact by providing name and contact information of your landlord as well as proof of rent payments for at least two years. This information is important because the lender then knows that you have been able to afford your monthly rent payments and thus, you will be able to afford the loan payments as long as the amount is not significantly higher.
Nevertheless, you will still need to show proof of income. This is done by providing employment paystubs or tax returns if you are self employed. Any additional information regarding accounts, stocks, bonds, savings, etc. can provide more incentive to the lender because it shows that you are still capable of responding in case your income shrinks or you are left unemployed.
Mortgage Loans For Past Bankruptcies
If you have gone through a bankruptcy process in the recent past, you will need to show proof of the that you have been granted the discharge (2 years since the discharge are usually necessary for approval) and that your credit has improved since that point. Therefore, your credit report will be pulled and your credit history examined. If you had a bankruptcy, your credit needs to be impeccable from that moment on and it is a good idea to provide a written explanation of the reasons for the bankruptcy (special situations that leaded to it).
Mortgage Loans For Previously Purchased Properties
If you have purchased a property already you will be required to show the title deed but if you have made arrangements for the purchase and already signed a sales contract which has not been perfected yet because you need to obtain the mortgage loan first, you will need to show a copy of the sales contract signed both by the buyer and the seller in order to prove that the property's ownership will be transferred to you.
Regardless of special situations like the above, there are certain documentation that you will always need to get approved for your mortgage loan: pay stubs from your employment or a certificate prepared by your employer stating that you work for them and are legally registered, if you are self employed, you will need proof of income that can consist on personal or corporate tax returns (if you run a business).
You may also be required to present current balances and other information on outstanding debt like student loans, personal unsecured loans, credit cards, lines of credit, mortgages and home equity loans.