After the mortgage debacle, mortgage lenders require more documentation than ever before. Providing documentation for your on time rent payments is no different. Paying your rent on time is an important aspect in the overall credit underwriting of your mortgage. Many lenders now require you to document the last 12 months of rental history. The last 12 months must be verifiable and paid on time for the underwriter to clear this condition.
Documenting 12 months of verifiable rental history is easier when you are renting from a property management company. If you rent from a private party, ensure you keep copies of the last 12 months of canceled checks, money orders, or cashier check. If you pay with money orders and/or cashier checks, make copies of the front and back of the check. Paying the rent in cash is the hardest to document. The underwriter could condition you for the last 12 months of bank statements to show that you have been withdrawing the rent payment from your account. Unfortunately, providing 12 months of bank statements could raise more questions.
In conclusion, preparing to purchase a house takes time and waiting until the last minute will cause undue stress on your life. Educating yourself on the process and preparing will ensure that the process will eliminate as much stress as possible.