A friend is buying a house, or trying. And like many people of a certain age, he has very few adult friends who have ever gotten a mortgage. I have, so I know it’s a scary process. So let’s talk about what paperwork you need for a mortgage pre-approval, and how hard the process is.
The paperwork you need depends
Getting a mortgage isn’t as hard as it sounds. There have been times in history when it’s been too easy, but even in the times when it hasn’t been too easy, if you fit the right profile, it’s very doable.
If you have a good credit rating, you may only need your driver’s license and a couple of pay stubs.
You heard that right. Getting a mortgage pre-approval is easier than registering to vote in many states.
What about when it’s not that easy?
A lot of it is up to the discretion of the loan officer and the loan officers chain of command. But here’s the thing to remember. The loan officer’s job is to hand out loans. If the loan officer doesn’t get you a loan, they don’t make any money.
Of course they need to be responsible about it. They can’t be giving out bad loans. But if you can afford the payments, and can prove it, getting you the loan is how they make their sales commissions. If they’re not getting loans out the door, they make about as much as a non-commissioned salesperson at Best Buy.
Presumably the reason they got a job at a bank was to make more money than they would make at Best Buy. Otherwise, what’s the point?
So they have an incentive to work with you.
For example, two pay stubs may not be enough if you change jobs recently. They need to know you’ve been working all year. That solution is pretty easy. Just provide a couple of pay stubs from your old job. They can do the math and see what you’ve made this year.
The most I ever had to provide was 2 years of tax returns. That was an extreme case. I am a landlord, and banks have mixed feelings about people like me. They like owner occupants much better, so it’s easier for the average person who intends to live in the home to get a loan than it is for me.
But if your credit rating is a bit questionable, or there’s something else making a loan officer nervous that a couple of extra pay stubs won’t take care of, they may ask for tax returns.
But that’s about it. Since I have good credit, I had no more trouble getting a mortgage pre-approval then I have getting a credit card.
And no, it didn’t cost any money.
How to get a mortgage pre-approval
Of course what paperwork you need for a mortgage pre-approval is only one question. You need to know where to ask.
You have some options. Your realtor will know someone. That someone may or may not be good, but the person will talk to you because they know the realtor. And it’s not like you have to be best friends. The loan officer my realtor introduced me to is an uppity snob, but she got the job done, however reluctantly.
If you would like a more pleasant experience, go to your regular bank or credit union. If you already have a checking account there, they may treat you better than your realtors buddy.
Another option is to just put a feeler out on social media. It turns out I had a classmate who ended up being a loan officer. Obviously that worked out pretty well since we had a pre-existing relationship that went back a couple of decades.
But for a one off loan, which is the majority, just pick an option you’re comfortable with and go with it. If you know someone, go that route. If the people at your bank are nice to you, go that route.
But even if you end up having to use your realtor’s buddy, and your realtor’s buddy is a snob, it’s a short process. And if they look down on you, that says more about them than you. It’s about a 30-day process, and if they get too lippy, The realtor may step in. After all, if the deal gets too rocky, you could walk away. And the realtor doesn’t want that. Neither of them make any money if that happens.
David Farquhar is a computer security professional, entrepreneur, and author. He started his career as a part-time computer technician in 1994, worked his way up to system administrator by 1997, and has specialized in vulnerability management since 2013. He invests in real estate on the side and his hobbies include O gauge trains, baseball cards, and retro computers and video games. A University of Missouri graduate, he holds CISSP and Security+ certifications. He lives in St. Louis with his family.