To complete a mortgage application, preparation of essential documents ensures a smoother process. Here's a list of fundamental documents typically required:
- Proof of Income
- W-2 Forms: Most recent two years to substantiate income stability.
- Pay Stubs: Recent pay stubs, usually covering the last 30 days, to verify current income.
- Tax Returns: Signed federal tax returns and schedules for the past two years.
- Business Income: Profit and loss statement if self-employed, and business tax returns.
- Proof of Assets
- Bank Statements: Last two months’ statements for checking, savings, and other accounts to show available funds.
- Investment Account Statements: Recent statements from any investment accounts to verify assets.
- Credit Documentation
- Credit Report: While lenders typically pull your credit report, be prepared to address any issues such as late payments or discrepancies.
- Explanations for Credit Events: Any letters of explanation for credit issues in the past, like defaults or bankruptcies.
- Proof of Identity
- Driver’s License or ID Card: Photocopy of your valid ID to confirm your identity.
- Social Security Number: Document providing your SSN, typically on the paystub or tax returns.
- Property Information
- Purchase Agreement: The signed purchase and sale agreement for the property you intend to buy, if applicable.
- Additional Documents
- Divorce Decrees: If applicable, to verify any alimony or child support payments.
- Gift Letters: If using gift funds, letters stating these funds are not a loan.
- Bankruptcy or Foreclosure Documents: If applicable, to explain these financial events.
These documents facilitate a comprehensive review by the lender, helping determine eligibility and facilitating the approval process. Be prepared for further requests as situations vary based on lender requirements and individual financial circumstances.