you apply for a mortgage, the lender will require a variety of
documents to process the mortgage application.
All banks and mortgage brokers will request the
same documentation at
mortgage application (and pre-approval) because mortgages must meet federal
loan guidelines. Make sure you have a driver’s license or state identification
card for all applicants. The lender may also want a copy of your social
security card for each applicant and co-applicant.
The mortgage application can be somewhat worrisome for the first time home buyer or can be a dull, monotonous procedure for someone who has previously applied for a mortgage. The best way to get your mortgage application approved quickly is too gather all of your personal documentation and have it ready when you apply for a mortgage.
The lender will request all of your W-2s for the past two years
when you apply for a mortgage. The lender needs
the employment dates and phone numbers for the employers also. The lender
must have pay stubs covering the most recent thirty days. Do you have
your tax returns for the previous 2 years? If so, take them with you
to the mortgage application. It can't hurt. The loan officer will
use a formula called
debt to income to determine whether the monthly income and
monthly debt is in proportion to the monthly mortgage payment. For
example, if the monthly debt is $1,000 (including mortgage payment)
and the monthly income is $5,000, the lender will divide the monthly
debt ($1,000) by the monthly income ($5,000), which results in 20%
debt to income ratio.
Bonus income, overtime and employee business expenses need to be thoroughly documented.
Any money received from Social Security, retirement, or disability can be used as income when you apply for a loan. The lender will require copies of the direct deposit bank statements and the award letter.
Self employment and commission income triggers additional paperwork. If you receive 25% or more from a business or earn commission income, the lender will require tax returns with all schedules, including K-1’s, if applicable for the previous two years. Be prepared to provide a current profit and loss statement and balance sheet from an accountant. Corporate or partnership tax returns for the previous two years need to be documented if you own 25% or more of the company in addition to copies of any W-2s and/or 1099 forms
SAVINGS & ASSETS DOCUMENTATION
Gather up all checking and saving account statements for past three
months. Make sure you have all pages, even the last page. Be ready to
explain any large deposits. Large deposits are a red flag for
mortgage underwriter because a large deposit may be a loan, and
mortgage applicants are prohibited from borrowing money to be used
for the down payment and or closing costs.
Also included with savings are the most recent IRAs, CDs, money market funds, stocks, 401k, and profit sharing statements. Even if you are not using CDs, money market funds, stocks, 401k, and profit sharing savings toward the purchase or refinance loan, showing the lender additional savings improves the likelihood of approval.
If you are using gift money from your parents, relatives, or organizations to help cover the down payment or closing costs, the lender will provide you with a gift letter . DO NOT MOVE ANY MONEY INTO YOUR SAVING OR CHECKING ACCOUNT BEFORE MORTGAGE APPLICATION. The money transfer from one person to you must transition is a precise way. This usually requires a copy of the bank statement from the gift-giver and a deposit slip of the gift money going into your account.
Lenders are required to document your residence for the previous 2 years.
CREDIT INFORMATION (if applicable):
If you’ve had a bankruptcy, you may need to bring a copy of the petition
for bankruptcy and discharge, including supporting schedules.
Divorce decree and property settlement will be required. If you are in the middle of a divorce, the lender may permit the mortgage to go through, provided the settlement agreement is recorded.
Child support may be used as income if the child support was received over the previous 12 months. Child support is used as a monthly debt if paid. Either way, have your child support papers ready for the loan officer.
DOCUMENTS NEEDED FOR VA LOANS:
VA home buyers need a certificate of eligibility and copy of DD214 discharge paper for VA application, however, the lender may be able to obtain the DD214 electronically from the Veterans Administration. Also required is the name and address of nearest living relative.
DOCUMENTS NEEDED FOR FHA & USDA LOANS:
The Federal Housing Administration (FHA) does not require additional personal information, however, the FHA does require the sales contract to contain the "amendatory clause and real estate certification form". This form is required for the FHA and USDA home loans. The form states in so many words that there are no side agreements between the buyer and seller that are not stated in the sales contract; and that the home seller can not require the buyer to purchase the home if the appraisal is lower than the sales price. The FHA will still allow the sale if the appraised value is lower, however, the home buyer must pay for the difference between the low appraised value and sales price. Home buyer, seller and all real estate agents are required to sign this document.
Homeowners who apply for a refinance loan will need a copy of the note, deed of trust or mortgage, deed and previous settlement statement (if available), survey and insurance information.
The lender needs a copy of the sales contract signed by all parties. Please make sure the copy is legible. If the lender is unable to read the contract, he will require a legible copy signed by all parties.
If you want to impressive the loan officer and shorten the application time, complete the Uniform Residential Loan Application.pdf