Call it the new mortgage reality. Many mortgage lenders got burned when the national housing market collapsed and now they are taking extra steps to protect themselves. Most mortgage lenders are requiring more financial documents and stricter guideline to qualify for a mortgage loan. But that doesn't mean getting a mortgage on a Kansas City home has to be too stressful as long as you're prepared.
Here are five ways to cut down on the hassles and help you anticipate the records you may need:
1. First, start by requesting a free credit report.
You won't be able to view your score, but you'll be able to view your credit. It's important to review a credit report from the three credit reporting agencies: Experian, TransUnion and Equifax. Make sure the information on each is correct. If you have any late payments or recent inquiries on your report, prepare to explain the circumstances to a mortgage lender in writing. You'll have to settle any open collections, state tax liens or judgments before you close your home purchase.
Mortgage lenders will ask for at least two months of pay stubs and bank statements. Pull out the past two year federal tax returns, W-2's and 401(k) statements. If you receive alimony or child support, request up-to-date records from the courts. Get on top of this because requesting up-to-date records can take up to 90 days.
Make sure your name, address and account numbers are correct on all lines of your credit report. If you recently changed your name because of marriage or divorce, make sure the update is reflected on all financial documents and match your identification. The same guidelines apply for your address if you recently moved.

3. Keep your finances simple for at least two months- Don't make drastic changes or create a problem.

Don't do anything funny? What does that mean?

That means don't make any out-of-the-ordinary deposits into your checking account; whether it's gift money, cash from selling a boat or payments from giving guitar lessons. If you do, make sure to have receipts and copies of checks to give to your mortgage lender to show the source of the funds.
One of my recent borrowers had to write a letter to a lender explaining that a $250 bank deposit was birthday money from her parents. Another had to prove that jewelry she sold craigslist actually sold for fair market value.

Another pitfall: Paying off a large debt ahead of applying for a mortgage loan. A lender will want to know where that big sum of money came from.
Lastly, don't overdraw your checking account for at least two months. Even if you have overdraft protection, the mortgage lender will think you have cash flow problems.

4. Document your down payment.
That means if you received an inheritance, request the proper documents to prove you rightfully were given the money and that it really isn't a loan. A down payment that taps money from a money market fund or other account requires a statement showing the transfer into your checking account. A 401(k) loan also must be documented. Get a copy of the 401 (k) statement before the funds are withdrawn then a copy of the statement of the account the funds are deposited into.

If you receive all or part of the down payment as a gift from a relative, you'll be asked to produce a letter that outlines your relationship to the gift giver, a bank statement from the donor, and a statement that the gift is not a loan.

A good rule of thumb: Any money going toward the down payment should be in your account at least two weeks before closing, including paychecks and bonuses. Some mortgage lenders will have problems with seasoning and will want the money in your checking account for a longer period of time.

5. Show a stable work history for the past two years.
Coming out of a recession, many Kansas City borrowers might need to explain any employment gaps in writing. Also, those who took temporary jobs or switched careers to deal with the hard times may have to field questions from the mortgage lender may want to address employment with the mortgage lender in advance. Another red flag for mortgage lenders: A wage cut or a change in compensation from say a salaried position to one where you earn commissions.

Have questions, we can help.