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.
Related reading: what underwriters look for and employment verification.