What Documents Do You Need to Apply for a Mortgage Loan?

June 04, 2018 Homebuying

Looking to speed up your mortgage process? By preparing your mortgage paperwork ahead of time, you’ll walk into a lender’s office confident in your buying power and avoid dragging out the retrieval of multiple documents. So what paperwork do you need to bring to a mortgage meeting?

Identification

To trace who you say you are and confirm your credit card information, lenders need the following:

Your social security number (you might include your social security card, tax documents, etc.)
A legible copy of your driver’s license or state ID
A legible copy of your Permanent Resident Card/VISA

Bank Statements

Lenders will want statements from all of your checking, saving, and investment accounts, most likely for the past two to three years. They’re looking for reckless spending and how much cash they can reliably expect you to have in reserve. Walk them through any large deposits or withdrawals in a detailed letter to keep those expectations realistic.

Gift Letter

If family members are contributing to your down payment, your mortgage lender needs to verify that you won’t owe that money back. Any outstanding loans would take away from your full timely mortgage payments.

Pay Stubs

You and your co-borrower both need to prove employment to indicate that you can repay your loans with consistent earnings. You will want at least three pay stubs, and the most recent one must be for the last 30 days.

W-2/1099

Your annual W-2 is provided by your employer for your taxes. You can find a physical copy attached to your tax return, or a digital copy available for download from the service that prepared your taxes (such as TurboTax). The income listed in your W-2 impacts how much lenders will approve for your loan. You’ll most likely need to include forms from the last two years.

Debt Information

The main qualification for a mortgage loan is your ability to show that you can afford your down payment, closing costs, and your first few mortgage payments. Equally important to your income are your outstanding loans. This might include the following:

Car payments
Credit card payments
Student loans
Rent
Homeowners insurance
Child or alimony payments

An itemized list of your monthly payments helps a lender calculate your debt-to-income ratio. In other words, whether you are a risky investment.

How your debt affects buying a home

Proof of Any Additional Income

To estimate your loan amount, lenders need to account for the full extent of your financial boundaries. To provide a complete picture of your assets, you might include the following:

Proof of pension income, dividend earnings, or bonuses
Proof of disability, retirement, or social security income with a copy of your award letter
Proof of security accounts such as stocks, bonds, or life insurance
Federal tax returns for the last two years for any self-employment or rental income
Personal tax returns and business returns for the last two years for any businesses you own

When you and your co-borrowers organize your loan application items in advance, it helps lenders quickly review your credit history and estimate a comfortable range for your budget. That helps you refine your home search and boosts your credibility with sellers.

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