First Time Homebuyer Mortgage Requirements

Qualifying for a home loan or mortgage can be an overwhelming process, especially for a first-time homebuyer. While the process can be complicated, it is similar for both a first time homebuyer and other applicants. In addition to the requirements listed here, other items may be required based upon your individual situation.

Verification of Income

To prove a borrower's income, a number of different items may be required. A minimum of 2 months' pay stubs and 2 years' tax returns will be required of all borrowers. Additional documentation will be required if the borrower has disability, alimony or child support income. Also, if the borrower receives payments from an annuity or dividends from stocks, account statements will be required. This information is required by the lender to prove that the borrower has sufficient income to cover all current debts and the new mortgage debt as well.

Verification of Assets

In addition to proving income, a borrower is required to prove his assets. This is usually completed by providing the lender with all pages of two months of your checking account statements. If a larger down payment is being used, savings and retirement account statements may be required. This information is required to ensure that the borrower has enough assets to cover both the purchase down payment, as well as any closing costs. Additionally, the borrower has to prove that he has enough savings to cover a few months of mortgage payments in the event of a financial crunch.

Verification of Employment

To verify a borrower's employment, a verbal verification will be required. This involves the lender speaking directly with the human relations department of the borrower's employer. If more than one job has been held by the borrower in the most recent two years, then each job will have to be verified. Additional verification may include a letter from the employer on company letterhead. This information is not only required to ensure that the employee has a job, but that he has one for the foreseeable future. This section is exceptionally important in today's economic environment.

Verification of Liabilities

To verify a borrower's liabilities or debts, a credit report is pulled. This reports lists each monthly debt paid (or not paid, if the case) of the borrower. The borrower is required by law to disclose any additional debts not listed on the credit report, such as alimony or child support. This section shows the lender that the borrower has been responsible with previous debts and will be responsible with future debts as well