Lender Checklist: What You Need When Applying for a Mortgage
When you apply for a home loan you will need to provide your lender number of documents. These documents verify a number of facts about your life, from your income to your debts and beyond. Here is mortgage loan documents checklist will help you prepare with correct documents to ensure your mortgage application goes smoothly.
Tax returns
W-2 forms or business tax return forms if you’re self-employed. Lenders generally want to see one to two years’ worth of tax returns. This is to make sure your annual income is consistent with your reported earnings through pay stubs and there aren’t huge fluctuations from year to year.
Pay stub
Lenders may ask to see your most recent pay stubs. Your tax returns help give them a clear idea of your overall financial health, while pay stubs help them gauge your current earnings. If you’re self-employed or have other sources of income (such as child support), you may need to show your lender proof through 1099 forms, direct deposits or other means.
Bank statements
Copies of two to four months of bank or credit union statements for both checking and savings accounts. When assessing your risk profile, lenders may want to look at your bank statements and other assets.
Lenders typically request these documents to make sure you have several months’ worth of reserve mortgage payments in your account in case of an emergency. They also check to see that your down payment has been in your account for at least a few months and did not just show up overnight.
Credit information
Lender, loan number, and amount owed on other installment loans, such as student loans and car loans. Do you have other outstanding loans that you’re currently repaying? If so, the lender may ask for documents related to those accounts. They need this information to measure your debt-to-income ratio, among other things.
Place of residence
Addresses where you’ve lived for the last five to seven years, with names of landlords if appropriate. For pre-approval and underwriting purposes, the lender wants to know where you’ve lived for the last couple of years (and maybe longer).
Retirement/Investment account statements
Copies of your most recent 401(k) or other retirement account statement. If you have a retirement or investment account you should provide one or two monthly statements to your lender. Even if you don’t plan on using these funds to buy your home, it may help prove that you are qualified. The underwriter will need to see that you have a certain amount of money in reserves.
Self-employment documents
Do you run your own business? If so, you might have to provide some additional documents during the mortgage pre-approval process. This might include balance sheets, a profit-and-loss (P&L) statement, or federal tax statements for the last two years.
Documentation to verify additional income
If you have any additional income that you want your lender to take into consideration when making a lending decision. You will need to produce proof of that income. For example, for alimony or child support, a copy of the court order may be necessary. You will need proof in the form of your bank statements or copies of cancelled checks showing the payments are regularly made and you may have to provide proof of your child’s age.
Conclusion
Keep in mind that this mortgage loan documents checklist is not exhaustive. Depending on your personal situation and your lender, you may be asked to produce more or less documents than those that appear above. Any time your lender requests documents, try to respond quickly and produce all of the requested documents. If you fail to do so, you will slow down the approval process. It’s best to go through this mortgage loan documents checklist and have everything ready before applying. This will make the mortgage process less stressful and you will be on the road to buy your new home without all the headaches.
Swee Ng, Realtor and Phoenix East Valley resident specializing in win-win real estate transaction through great communication and fighting for his clients’ best interest. After all, this is more than real estates, this is about your life and your dreams.
If you are looking to buy or sell your home in Phoenix AZ and surrounding area, we hope you will consider us. Contact us today for complimentary consultation.
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