6 Documents You Need for a Mortgage
Prepare your briefcase! The piles of paperwork that are required to qualify for a mortgage are no myth. When you apply for a mortgage, your lender will fully vet your financial history. They will want evidence to prove you can pay their money back. After all, the financial stakes when you buy a home are high for a lender as well as yourself.
Here are six documents you should be prepared to present when you apply for a mortgage:
- Tax returns
If you’re like most people, your paycheck is your most reliable source of income, and your tax returns reflect just how reliable that paycheck is. If you have reported sufficient wages for the last two or three years, you probably have a sufficient, stable income. This is what lenders want to see!
- Pay stubs
Unless you’re applying for a mortgage in April, after you’ve just filed your taxes, your pay stubs are a more accurate representation of what you’re earning now than last year’s tax return. Your lender will want this info.
- Proof of other income
If you are self-employed, receive child support, or have other stable but miscellaneous sources of income, you don’t want to lose credit. Use bank records showing direct deposits or 1099 forms to demonstrate a stable history of income from a source other than an employer.
- Employment letters
Your lender may want confirmation from your employer that you are currently employed and that you have accurately reported your salary. Also, if you have had a gap in employment (like sick leave or maternity leave), a letter from your employer can explain this to your lender.
- Proof of funds
There’s a difference between having an income and having funds to cover your down payment, closing costs, and any emergencies in the near future. Even people with high incomes may be living paycheck to paycheck if they have not exercised the discipline required to save up money. You should be prepared to provide current statements for all your bank accounts as proof that you have money ready to go.
If you’ve had a recent windfall that ended in an unusually large deposit to your bank account, lenders may expect a written explanation for the funds. Lenders don’t want to hand out mortgages based on lucky flukes.
- Photo ID
Almost any time you sign a legally binding document, you will be asked to prove that you are who you say you are. Usually, a copy of your driver’s license is sufficient for signing a mortgage.
With all the personal documentation requested, you might begin to feel that your lend is overly wary of you. Don’t take it personally! Lenders are trained to fact-check. Rather than seeing all the paperwork as an onerous mountain, see it as a ramp up to your goals.