One of the most tedious parts of home buying is gathering the right documentation, but prepping beforehand makes it that much easier.
The documents required for a mortgage application can be categorized by type: Proof of Income/Employment, Proof of Assets, Credit History, and Residential History. These give potential lenders a glimpse into your situation so they see whether you’re a worthy bowerer or not. Here’s a comprehensive mortgage application checklist to help you prepare for the lending process.
As you might have expected, income plays a significant role in a lender’s decision-making process. Multiple documents are needed to prove you can afford the payments.
Tax returns. Many lenders require at least two years of tax returns & W-2s to prove income stability. Check with your employer or the IRS if you don’t have these available.
Pay Stubs. Lenders usually ask for pay stubs from the last 30 days to demonstrate how much you’re currently making or have made in the past.
Alternative Forms. Other sources of income like child support, social security, disability, etc. might need to be proven through direct deposit information instead of a pay stub.
Employment Letter. This letter confirms your hire date and employment status for extra assurance that you’re honest about what you do.
Employer Contact Information. A lender may request a contact list with the company names, addresses, former bosses, HR representatives, and contact information.
The lender will look at assets to see how much cash is available to you if something were to happen and you couldn’t pay for the mortgage. As proof of your assets, they’ll look for the following documents:
Bank Statements. Lenders will ask for bank statements that cover the last 30-60 days, proving what is deposited and taken out of your account every month.
Proof of Property. If you own another home/property, be prepared to provide proof of ownership.
Gift Letters. Written documentation that proves money given to you is a gift specifically to pay for your new home and not a loan.