More than 6 million homes are sold in the United States every year and, with rising property prices, most home buyers need a mortgage to finance their big move. As lenders become stricter, they might ask you to provide what seems like a mountain of paperwork — pay stubs, bank statements, tax returns, and more. With so much at stake, securing a mortgage is often a seriously stressful experience. It doesn’t have to be this way, though. This mortgage checklist tells you all the documents you might need when financing your dream home. These documents fall under three main categories: Income verification, asset information, and credit verification.
Income verification
Your lender will want to see evidence that you meet their income requirements for your new mortgage. Despite the fact that many processes associated with home loans are now paperless, you might still need to provide hard copies of the following documents:
W-2s from current and past employers.
You will normally need to provide W-2 forms from all employers from the last 2 years.
Pay stubs
Lenders will usually ask to see pay stubs from the previous 30 days and might request your employer to sign them.
Note: If you work for yourself, you will need to show completed accounts/tax documents from this same period.
Bank statements
Usually from the last 2-3 months in order to verify your income.
Asset Information
Your lender will want to see proof of any assets you have, such as retirement and savings funds. Usually, bank statements will be sufficient.
Proof of retirement and savings accounts
Bank statements of any retirement or savings accounts you hold, usually from the last 2-3 months.
Gift letter
If you are using gift funds to cover some or all of the down payment on your new property, lenders might ask for a copy of the donor’s bank statements to prove where the money has come from.
Credit Verification
The rest of the process is relatively straightforward. Lenders will check the information on your credit file (as well as any information they hold on you if you have an existing account with them) to verify your identity and financial information.
In some cases, lenders might ask for additional documents to support the information on your credit file, such as credit agreements with other lenders.
Bankruptcy information
If you have been declared bankrupt in the past, your lender might ask for proof that you have satisfied your debts.
Rent, utilities, and cable TV information
In rare instances, a lender might ask for additional information if there is not enough data on your credit file. If this is the case, they might ask you to supply proof of previous rent, utility, and cable TV payments (where necessary).
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