Documents You May Need to Submit When Applying for a Mortgage
It’s a good idea to start gathering and putting together your financial documents if you’re applying for a mortgage. Lenders will request documentation that proves how much money you make and how much debt you have, among other information. The exact forms you’ll need depend on your situation, but we’ve made a list of the most common documents required by mortgage lenders.
Pay Stubs/Income Verification
Income verification from your employer is one of the most important documents for any mortgage application. Your lender will want to see proof of how much money you make every month, whether it’s an actual pay stub or a letter from HR verifying your annual salary and bonus (if applicable). This type of document will also be required if you’re self-employed or a business owner with multiple sources of income.
Tax Returns
Your lender will look at your tax returns as well as any W-2 forms filed with the IRS to verify your income and determine whether there are any financial red flags that could affect your ability to pay back the loan.
Bank Statements and Proof of Other Assets
While assessing your risk profile, your lender may want to take a look at your bank statements and proof of other assets. The lender will request these documents to make sure you have several months’ worth of reserve mortgage payments in your account in case of an emergency. The lender will 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 Report
When you apply for a mortgage, most lenders will pull your credit report with your permission. A credit report is a detailed accounting of your debt and bill payment activity. By pulling your credit report, lenders can better understand your track record of loan repayment. A high credit score can help you secure a loan offer at an affordable rate. Conversely, if you have a low credit score, your application may be denied, or you may be charged a high APR.