Are You Organized Enough to Buy a Home?
Are you organized enough to buy a home? Get an easy to use guide on the paperwork you need to prepare & how to keep it all in order.
Buying a home involves a myriad of documents, people, tasks and to-dos. If you don't have everything in order it can cost you.
Monique Bryher, Broker-associate/Realtor® at Pinnacle Estate Properties, provided us with this insight:
"Sometimes they [buyers] look for a home to purchase, find the "perfect" home, but are not in a position to make an offer because they didn't take the time to prepare and get a pre-approval. Sometimes they have the pre approval but do not have all their tax returns and other documents ready. When they make their offer, delays then occur because the lender cannot obtain underwriting approval pending receipt of the paperwork. Buyers, especially first-time buyers, can be resistant to their agent's advice to have all their paperwork in order."
It may not be the most glamorous or interesting part of the process, but being prepared with your paperwork is essential. Learn how to keep it all in order, what paperwork you need to have prepared and more.
Paperwork You Need to Prepare
Pre-Approval and Loan
- Tax Returns (at least one year, if self-employed or paid by commission typically last 2 years)
- W2s (typically last 2 years)
- Pay Stubs (typically the last two with year to date earnings included)
- Bank Statements (typically last 2 months)
- Investment Account Statements
- Copy of Your Driver's License or Photo ID
- Credit Report
Your credit report is the first document you should obtain before you even approach a lender. The reason being, if there are any mistakes you can get them taken care of before a lender starts analyzing your credit score.
Beyond documentation you'll also have to provide a lot of information. Typically a lender will want the name, address and contact information for any individual or business that manages any of your debt and/or assets.
Submitting an Offer
- Copy of Your Pre-approval Letter
- Sales Contract - signed and dated
- Any Addendum
Documents for Close
- Sales Contract - signed by Buyers and Sellers
- Title
- Title Insurance
- Copy of Your Driver's License or Photo ID
- Deed
- HUD-1 Statement
- Survey
- Proof of Home Insurance (if required by the lender)
- Proof of Required Repairs
- Checks (possibly certified or cashier's check)
Some of these documents are ones that you will need to bring with you to close and others will be prepared by the title company. However, you still need to be aware of who will be ensuring that all the required documents are brought to the close.
Keep in mind that those these are the typical documents needed at close, the legal requirements vary by state. They also depend on the type of property you're buying and how the property is being purchased (i.e. cash, conventional loan, FHA home loan, etc.)
Answers to Common Questions
What if I own another property?
You should provide information that includes the property address and current market value. If you are still paying off a loan on that property you must list the lender contact information, current balance and monthly payment amount.
If the property is leased out you need to also provide a copy of the lease.
What if I filed for bankruptcy in the last 7 years?
Besides needing an excellent credit score, you will also need to have a written statement explaining the reason for the bankruptcy and a copy of the petition and discharge.
What if I want to include child support or alimony as a part of income?
If you are including child support or alimony as a part of your income you will need to provide copies of court records that show receipt of payment.
What if I'm paying cash?
If you're paying cash there will be far fewer documents. However, you will need to provide information about your assets to prove that you have enough to cover the cost of the home.
How to Keep it All in Order
Working with an Agent - Having a real estate agent working for you will be a huge help when it comes to getting everything in order and keeping it that way. They'll take a lot of the burden off your shoulders and can advice you on exactly what you need prepared at every step along the way.
Having a Copy Online - This will guarantee that even if you're not at home you can still access your documents from anywhere with an internet connection. Your email account can actually be a great resource since you can easily search for documents. Just make sure that you include certain words in the subject line or message that will be searchable.
Filing System for Hard Copies - The tried and true file cabinet will ensure that all your hard copies are together in one place and sectioned off so that can easily be found. You can also use portable filing folders to keep things organized on the go.