David Braun | Chicagoland Mortgage Guidance
Illinois Mortgage Preapproval Checklist
A practical, plain-English guide to the documents Chicagoland homebuyers may need for mortgage preapproval, application and underwriting.
Start Prepared
What should you gather before mortgage preapproval?
A lender generally needs to verify income, employment, assets, debts and credit history. The exact documents depend on your loan program, employment, business ownership, property, down-payment source and individual financial profile.
Loan Estimate versus preapproval documentation
A full preapproval and underwriting review may require supporting documents. However, the Consumer Financial Protection Bureau explains that a lender cannot require documents such as W-2s or pay stubs merely as a condition of providing a Loan Estimate after receiving the six required pieces of information: name, income, Social Security number for a credit report, property address, estimated property value and desired loan amount.
Income Documentation
Documents commonly requested from borrowers
Salaried and hourly employees
- Recent pay stubs showing year-to-date earnings
- W-2 forms from the applicable prior years
- Complete federal tax returns when required
- Employer names, addresses and contact information
- Two-year employment history, including dates and positions
- Documentation for bonuses, commissions, overtime or variable income
- Written explanation and supporting documents for material employment gaps
- Offer letter or employment contract when relying on eligible future employment income
Income documentation and history requirements can vary based on the income type, automated underwriting findings and loan program.
Self-employed and business-owner borrowers
- Complete personal federal tax returns, including all schedules
- Business tax returns when required for the business structure and ownership percentage
- Schedule C, K-1, Form 1065, Form 1120-S or Form 1120, as applicable
- Year-to-date profit-and-loss statement when required
- Current balance sheet when required
- Business bank statements when applicable
- Documentation showing business ownership and the business is active
- Explanation and documentation for significant changes in revenue, expenses or business structure
Gross business revenue is not automatically the same as qualifying mortgage income. Underwriting evaluates eligible income after applying the applicable program rules.
Other income you want considered
- Social Security, disability, pension or retirement award letters
- Recent retirement or investment account statements
- Divorce decree, separation agreement or support documentation when relying on eligible support income
- Lease agreements and tax returns for qualifying rental income
- Documentation for trust, note, royalty or other qualifying income
You are not required to disclose income you do not want considered, subject to the information required to complete an accurate loan application and applicable law.
Funds for the Transaction
Bank statements, assets and down-payment documentation
Bank and investment accounts
- Complete recent statements for checking and savings accounts
- All pages, including blank pages and disclosure pages
- Retirement, brokerage or other investment statements when those funds will be used
- Documentation for earnest money already deposited
- A clear paper trail for funds moved between accounts
- Supporting records for significant deposits when requested
- Documentation for proceeds from an asset sale when those funds are being used
Do not alter, crop or redact statements unless your mortgage professional or secure document system specifically permits it.
Gift funds and assistance
- Gift letter using the lender’s required format
- Donor information and relationship to the borrower
- Evidence of the donor’s ability to provide the gift when required
- Documentation showing the transfer and receipt of funds
- Down-payment-assistance approval or program documents
- Evidence that gift funds are not an undisclosed loan
Acceptable donors, gift amounts and documentation vary by mortgage program. Speak with your loan officer before transferring funds.
Credit and Financial Events
When a written explanation may be requested
Credit-report explanation guidance
A lender may request a signed, dated explanation for matters such as:
- Recent credit inquiries
- Late payments, collections or charge-offs
- Disputed accounts or identity-related issues
- Addresses or employers that do not match the application
- New accounts or debts that recently appeared
- Material employment or income gaps
- Large deposits or transfers that require clarification
Keep explanations factual and concise. State what occurred, when it occurred, how it was resolved and what documentation supports the explanation. Never provide false or misleading information.
Bankruptcy and other major credit events
Depending on the event and loan program, commonly requested records may include:
- Bankruptcy petition and applicable schedules
- Discharge, dismissal or closure order
- Chapter 13 payment history or trustee documentation when applicable
- Foreclosure, short-sale or deed-in-lieu documents when applicable
- Proof that obligations were resolved or paid when relevant
- Signed explanation of the circumstances and current financial position
Waiting periods and eligibility are program-specific and depend on the event dates, disposition, credit history, documentation and underwriting findings. Do not rely on a generic online timeline for a personal eligibility decision.
The Property Matters
Chicagoland property taxes, condominiums and HOA costs
Property and tax information
- Complete property address and executed purchase contract when available
- Current property-tax information and tax parcel details
- Information about homeowner exemptions currently affecting the tax bill
- Homeowners insurance quote or agent information
- Planned property use: primary home, second home or investment property
- Property type, including single-family, condominium, townhome or multi-unit property
Illinois property taxes can materially affect the complete monthly housing payment. Current exemptions or tax bills may not remain unchanged after a sale.
Condominium and HOA information
- Current monthly or annual association assessment
- Information about special assessments
- Association contact or property-management information
- Applicable condominium questionnaire or project documents
- Unit and master insurance information when required
- Information about litigation, repairs or project conditions when requested
Association dues and special assessments can affect both affordability and qualification. Certain loan programs also evaluate the condominium project.
Protect Your Approval
What borrowers should avoid before closing
Your financial profile may be checked again before closing. Speak with your mortgage professional before making a significant financial or employment change.
Avoid doing these things without first discussing them with your loan officer
- Opening, closing or co-signing a credit account
- Financing a vehicle, furniture, appliances or another major purchase
- Missing or paying an obligation late
- Changing jobs, compensation structure or employment status
- Making unexplained cash deposits
- Moving large amounts of money between accounts without preserving the paper trail
- Paying off debts solely to qualify without receiving guidance about the documentation and impact
- Taking a loan against an asset or retirement account without disclosure
- Allowing new credit inquiries that may result in additional debt
- Omitting debts, properties, businesses or other material information from the application
Save or Print
Your mortgage preapproval document checklist
Check only the items that apply to your situation. Your lender may request additional or updated documents.
Illinois Mortgage Preapproval Checklist
Identification and history
Income
Self-employment, if applicable
Assets and funds
Credit and financial events
Property, when identified
Security reminder: Do not send Social Security numbers, full bank statements, tax returns or other sensitive records through ordinary text messages or unencrypted email. Use the lender’s approved secure document system.
Authoritative Resources
Official mortgage-documentation resources
Get your mortgage documents organized before you shop.
David Braun can help you identify which documents apply to your situation and prepare for the mortgage process before you make an offer.
David Braun, Mortgage Loan Officer | NMLS #303007
This page is for general educational purposes and is not legal, tax, accounting, financial, credit-repair or individualized mortgage advice. Mortgage programs, documentation standards and underwriting requirements can change and vary by borrower, property, lender and loan program.
All loans are subject to application, complete documentation, verification, program eligibility, underwriting and final approval. Nothing on this page is a commitment to lend or a guarantee of approval, interest rate, loan terms, payment, closing date or property eligibility. Equal Housing Opportunity.
This webpage does not collect or store financial documents. For accessibility assistance or an alternative way to receive this information, call David at 312-656-0220.