Yup, buying a house is like signing your life away! There is a lot of paper work involved in buying a home. One good thing, it won’t come to you all at one time. Another good thing, you can do things to make it go smooth, meaning some of the required document flow, you can control.
When your lender advises you what they need you to furnish, give yourself time to gather the documents. Don’t try to do it all in one day and don’t wait till the last minute. The type of documents you need aren’t meaningless, they each have an important purpose:
- Identification – Proves who you are with your driver’s license, social security card.
- Verification – You’ll need to prove your income that show you can afford a mortgage. Most lenders may request 2 years back of your 1040, W2.
- Property Detail – Your lender will want to know who you’re buying the house from; the desired transaction date; what all is to be included in the purchase (appliances, furniture, extra lot, pool table, etc).
- Property Documentation – Your lender will need to be able to identify the property, determine who owns the property (lender the seller is financed with), property appraisal, property survey, property title. Because every lender has their own requirements, there will probably be more paper work required.
- Property Disclosure – This is for your own good as well as the lender and is required by the government. These are known as Truth In Lending and include asking price of the house, the interest rate you’ll be paying (note rate), APR disclosure, your down payment and if any other expenses you should expect at closing, any expenses you will be refunded and anything you have the right to know as the buyer regarding the property.
While some of these things may not be easy and quick to get your hands on, you may get frustrated, possibly discouraged. Just remember, in the end, you will be a homeowner. Buying a home is a huge investment and a big step for anyone. As you muddle through all this paper work, keep your chin up and your eyes on the prize at the end of the paper trail!