If you’ve not been checking up on the mortgage market in the last five years, you might be surprised to discover some changes to the list of mortgage documents requested. There’s definitely much more documentation requested and lenders are also much more diligent in collecting the paperwork that gives them the assurance of your ability to make monthly mortgage payments.
If you’re completely new to the mortgage market or have not applied for a mortgage in recent years, here is a list of documents requested these days:
Common Mortgage Documents requested:
Tax returns from the last two years –
Your lender will ask that you provide all the pages from these two sets of returns in order to verify the consistency of your household income. Fluctuations in income do not give them confidence in your ability to meet monthly payments.
Two most recent pay stubs from your company –
Your approval will be largely based on your current salary, so the pay stubs have to be the two latest for the lender to review them.
Written verification of your position and salary –
This has to be dated and written on company letterhead. Lenders may also call your company on top of it to ensure that you’re still employed there. They’ll want to verify length of employment as well.
1099 forms –
These are requested from those who are self-employed. They show how much you as an independent contractor have been paid by various clients in a year. Coupled with your tax returns, these will convince lenders that you have a steady income despite being self-employed. Customers who have paid you more than $600 in a year must send you a 1099 form.
Financial statements from the last two months –
Your bank probably mails you these or, if you do online banking, you can simply print them. Besides these, you might be requested to provide copies of all your retirement and investment accounts. Lenders want to know that you have something to dip into in case of a financial emergency.
Photo ID –
All those whose names are to be on the loan will be asked to provide one.
Canceled rent or utility checks –
These are usually requested to confirm that you have a record of on-time payments.
Gift letters –
In case someone is helping you cover the down payment or closing costs, these should indicate that your donor is giving you the stated amount and does not require you to pay it back.
Signed sales contract –
This only applies if you have made an accepted offer on a house.
Proof of homeowners’ insurance –
You first have to take out an insurance policy on your new home for lenders to give you a mortgage loan.
Gather these Mortgage Documents requested together to make your application a smoother process.
Need even more information on the mortgage documents requested? Click here.
