How To Get Prequalified For A Mortgage (Financial Colonoscopy)
How To Get Prequalified For A Mortgage (Financial Colonoscopy)
When I first considered working with my real estate coach, I really didn't think that it would be all motivation and mindset—the dreamy “woo-woo” stuff we have been talking about for the past month or so. I signed up and paid the fee because I wanted to take action. I couldn’t have been more wrong.
Right out of the gate, I had 3 assignments.
First, I wrote out a vision for my life—a brain dump of every dream I could imagine. It wasn’t about having practical steps to achieve those dreams right away, it was about burning everything to the ground: thinking as big as possible, no matter how impossible it seemed.
Then I created a personal financial statement. This would come in handy for the action steps my coach assigned soon after.
And finally, the heaviest one: I wrote my own eulogy. That one was a monster energy drink for my motivation.
After turning in those assignments, I wondered, What’s next?
Can we get to the real estate already?
Turns out, the real work was just beginning.
My coach kept pushing me to take action, and soon I had more tasks on my plate. He sent me books to read—books that completely changed my outlook on money, business, and life.
Here’s a few of volumes on the list:
I dove in and devoured them. These books weren’t just tips and theories; they were frameworks that shifted my thinking. If you haven’t read them yet, go grab a copy of each.
Reading was just the start.
What was the big goal? What was the reason I swiped my card in the first place?
My mission was:
To buy my first rental property, and in so doing, learn a simple real estate investing strategy that I could use as a tool to make my dreams a reality.
The Plan
Together, my coach and I worked out the game plan.
We weren’t just looking for any old property—it had to check a few key boxes:
Affordability: As I would soon find out, I couldn't afford to buy a 27 unit apartment complex. I would have to find a property that was under $130k.
Sweat Equity: We needed a property with room for improvement—a fixer-upper where I could put in just the right amount of sweat equity and add significant value.
Scope of Work: This ain't HGTV. Ya boi couldn't sign on the dotted line for a total gut job. i was after a deal that required as little renovation as possible.
Live-In Potential: I hadn’t moved out of my parents’ house yet, and my coach insisted I buy something I could live in. He wanted me to feel the responsibility of homeownership firsthand, and he was right. That experience was invaluable.
Rental Income: The property also had to have rental potential, whether that was renting out rooms or a full unit to help cover the mortgage.
And step one? Getting pre-qualified for a mortgage.
The Prequalification Process
Now, I had a little experience here—I was working as a licensed mortgage loan officer at the time. But applying for a mortgage as the borrower? That was an entirely new ballgame.
If you’ve never applied for a mortgage, here’s what you can expect:
Income Docs:
2 Years W-2 Forms
2-Years of Tax Returns
30 days worth of Pay Stubs
Additional Income Documentation: You may need to provide proof of income from bonuses, commissions, alimony, child support, Social Security benefits, or military rental properties.
Proof of Assets:
Gift Letters: If using gift funds for the down payment, include a letter stating the money is a gift and not a loan.
Bank Statements: Statements from checking and savings accounts for the past two months.
Investment Account Statements: Recent statements from retirement accounts, stocks, bonds, or other investments.
Additionally, you will have to provide:
Employer Information: Names and addresses of employers for the past two years.
Self-Employment Documentation: If self-employed, provide business tax returns for the last two years and a year-to-date profit and loss statement.
Photo ID: A valid driver's license, state ID, or passport.
Social Security Number: Your Social Security card or Individual Taxpayer Identification Number (ITIN).
Residential history (often the past 2 years, every address you have Social Security number, recent financial documents (like bank statements and pay stubs), and your credit history.
To put it bluntly, the lender will give you a financial colonoscopy if you are a new borrower.
And still...
Getting the green light from a lender isn't the finish line—it is just the starter pistol.
Once I submitted the mortgage application, it was time to build my team.
I can't wait to tell you more.
Talk soon,
-Jonathan
