Documents Needed for a Mortgage
Photo by: PiggyBank
Are you thinking of applying for a mortgage? Congratulations! Owning a home is a major milestone and an important investment. However, before you can start looking for your dream home, you need to apply for a mortgage. One of the most important parts of the mortgage application process is providing the necessary documents. In this article, we will cover all the documents you will need to provide for your mortgage application:
Paystubs for the last 30 days: The first document you need to provide is your paystub for the last 30 days. This document shows your current employment status, how much you are paid, and any deductions taken from your pay. Make sure you include all paystubs from any jobs you currently hold.
W-2s and 1099s for the last 2 years: These forms show your income and tax payments for the previous two years. If you are self-employed, you will need to provide your 1099s and a profit and loss statement.
Federal income tax returns for the last 2 years: You will also need to provide copies of your federal income tax returns for the last 2 years, including all schedules and attachments. Make sure you have your complete tax returns and not just your tax transcripts. Your lender will need to verify your income, deductions, and tax payments.
Government-issued photo ID and if applicable, resident alien card: You will need to provide a government-issued photo ID, such as a driver's license or passport. If you are not a US citizen, you will need to provide your resident alien card.
Last 2 bank statements for all bank accounts (borrower and co-borrower): Your lender will want to see your bank statements for the last 2 months for all bank accounts in your name and your co-borrower's name. This document verifies that you have enough funds for the down payment, closing costs, and reserves.
Last 2 investment account statements (borrower and co-borrower): If you have any investment accounts, such as a retirement account or brokerage account, you will need to provide your statements for the last 2 months. Your lender will want to see the account balances and transaction history.
Already a homeowner? If so, please provide:
Current mortgage statement: If you already own a home and have a mortgage, you will need to provide your current mortgage statement. This document shows your current mortgage balance, monthly payment, and any escrow payments.
Current property tax bill: This document verifies your property taxes are current and paid in full.
Recent homeowners insurance statement: Your lender will want to see proof of your current homeowners insurance policy. This document shows the coverage amount, policy number, and expiration date.
Recent HOA statement: If you live in a community with a homeowners association (HOA), you will need to provide your recent HOA statement. This document shows your current HOA fees and any outstanding balances.
If you are renting, you will need to provide the following documents:
Lease agreement: Your lender will want to see your current lease agreement. This document shows your current rent amount and lease terms.
Last 2 years of rental/landlord history: Your lender will want to know about your rental history to see how you have handled previous housing expenses. This information helps them determine whether you are a reliable borrower.
If you are self-employed, you will need to provide the following documents:
YTD profit/loss statement: This document shows your business's income and expenses from the beginning of the year to the present. It helps your lender determine your current financial status.
Balance sheet: A balance sheet is a financial statement that shows your business's assets, liabilities, and equity at a specific point in time. It provides your lender with an overview of your business's financial health.
Last 2 years of business tax returns : Your lender will want to see your business tax returns from the past two years to verify your income and expenses.
Self-employed borrowers often have more complicated financial situations than those who are employed by a company. By providing these documents, you can help your lender understand your financial situation and make the mortgage application process easier.
If applicable, you may also need to provide the following documents:
Gift funds: If you are receiving gift funds for your down payment, your lender will require a gift letter from the person providing the funds. This letter should state that the funds are a gift and not a loan, and should include the giver's name, address, and relationship to you.
VA applicant: If you are a veteran applying for a VA loan, you will need to provide a DD-214 form if you have been discharged or a statement of service if you are currently on active duty.
Divorced: If you are divorced, you will need to provide a divorce decree or legal separation agreement to verify any alimony or child support payments.
Paying or receiving child support: If you are paying or receiving child support, you will need to provide a copy of the court order and proof of payments.
Bankruptcy in the last 7 years: If you have filed for bankruptcy in the last 7 years, you will need to provide a complete copy of your bankruptcy papers, including the schedule of debtors and discharge.
Foreclosure or short sale in the past 7 years: If you have had a foreclosure or short sale in the past 7 years, you will need to provide the complete property address of the foreclosure or short sale.
On an IRS repayment plan: If you are on a repayment plan with the IRS, you will need to provide a copy of the plan.
Retired: If you are retired and receive Social Security, retirement, or pension income, you will need to provide an award letter or retiree statement. You will also need to provide your last 2 years of 1099s.
Providing this information may seem like a lot of work, but it is necessary to ensure that your mortgage application process goes smoothly. Your lender will use this information to verify your income, expenses, and other financial details. By providing all the required documents upfront, you can avoid delays and make the process easier for yourself and your lender.
Remember, these documents are just the starting point. Depending on your specific situation, your lender may request additional documentation. Be prepared to provide any additional documents in a timely manner to avoid delays in the process. With the right preparation and organization, you can make the mortgage application process a smooth and stress-free experience.
Photo by: Corinne Kutz
If you have any questions about the required documents or the mortgage process in general, don't hesitate to contact me!
