How to get preapproved for a mortgage loan

We've put together a simple checklist of things you'll need to get a mortgage preapproval. This checklist will get you organized and prepared so that you can get a lender preapproval as quickly as possible and you're not just stumbling into the process. If you are trying to buy a home in a competitive housing market, you probably already know that getting a mortgage preapproval letter is an absolute must-have before making an offer on a home. Sellers won't even look at your offer unless you can show a preapproval letter that proves you can afford the house.

Spend 5 minutes reading our mortgage preapproval checklist now - it could save you countless hours later in the process!

Get the following information together:

1) Information about the home you want to buy

• The price of the home you want to buy (estimate if you're still shopping)
• The ZIP code of the area where you're looking to buy a home
• How much money you have for a down-payment

2) Information about you and any co-borrower

• Your drivers license or photo ID
• Your Social Security number
• Your address history for the last two years
• Your employment history and income for the last two years
• Date of any bankruptcy, foreclosure, or short sale if you ever had one

3) Your monthly debts

• Monthly rent (if renting)
• Car loans
• Student loans
• Credit cards
• Any other loans

4) Proof of income and assets

• Last two (2) months of bank statements (include all pages, even blank ones!)
• Proof of Employment Income:
  If you have a regular job
  • Latest 1-month of paystubs
  • Most recent Federal tax return (e.g. Form 1040)
  • Most recent W2 form
  If you are self-employed
  • Last 2 years of Federal income tax returns:
    • Sole-Proprietorship: Form 1040, Schedule C, and any 1099 forms you received
    • Single-person LLC: Form 1040, Schedule C and any 1099 forms you received
    • Multi-member LLC: Form 1065 (if a partnership) and Schedule K-1 forms
    • S-Corporation: Form 1120S, Form 1125-E and W2s if applicable
    • C-Corporation: Form 1120, Form 1125-E and W2s if applicable
• Proof of any other assets you own (CDs, mutual funds, retirement accounts, stocks, etc)
• Proof of any other income (SSI, rental income, dividends, alimony, child support, public assistance, capital gains, pension, retirement income, trust income, etc)

5) Information about any real estate you currently own

• Property address
• Property value
• Mortgage statement on property
• Insurance statement on property
• HOA fee
• Any HELOC statements you may have

Gotchas and things to avoid!

Before applying for a mortgage preapproval, be aware of things you should avoid doing that could hurt your preapproval chances. Loan underwriters (the people that make the decision on approving or denying a mortgage application) often look for recent activity you've done that might raise red flags. Here's a list of some things that could cause issues or delays:

• Making a large deposit into your bank account in the last 2 months
• Switching jobs / quitting your job / retiring
• Opening any new credit accounts or credit lines
• Closing any credit accounts
• Making any major purchases (like a car)
• Maxing out your credit cards and racking up debt
• Being late on any bills