Documents Needed to Submit a “Complete” Mortgage Application

Locate These Documents BEFORE You Make a Mortgage Application

You need to submit a complete application before you can expect a formal approval decision. Here is a suggested checklist for you to assemble the documents you need to submit a complete application to your mortgage lender.

  • Two years’ W-2 forms if you are an employee

  • Profit and Loss statements or 1099 forms, if you are self employed

  • Two, three or four recent paycheck stubs

  • Your most recent tax return or the past two years’ returns

  • A total list of your debts, required monthly payments, and loan or child support payments, with current balances

  • A list of your assets, with bank and investment statements, other real estate owned, automobile descriptions and values, and records of other investments, or assets.

  • Copies of canceled checks for your last 12 months’ mortgage or rent payments.

Explanation of Some Individual Necessary Documents

  • Self-employed borrowers should submit a profit & loss statement for the current year, if the year is more than one-half over. Since there are few stated income loans since the housing crisis, self-employed applicants should plan on verifying their income.

  • Paycheck stubs should cover your last month’s income to verify your monthly gross income. This means you need the last two stubs if you’re paid bi-weekly or your last four (maybe five) stubs, if you’re paid weekly. Just remember, you need to verify at least one month’s income, however you earn income.

  • Tax returns are required for self-employed applicants and you are required to sign IRS Form 4506, which gives the lender your permission to get a copy of the return you filed. While this action formerly was a lender option

  • Listing your debts allows your lender to verify your debts, which should be close to those listed on your three-bureau credit report, commonly called a “tri-merge.” Having this information permits your lender to accurately calculate your housing and total debt ratios.

  • Listing your assets, including your current and past bank statements, help lenders verify your claims of having sufficient cash to make the required downpayment, whatever it may be. Most mortgage types prohibit getting undisclosed loans or family gifts to generate enough downpayment cash to fill in gaps in your savings, although some mortgage programs allow gifts from immediate family members.

  • Canceled rent or mortgage checks can tell their own story about your payment pattern for housing obligations. Copies should have both sides of the checks so the lender can see when your bank cleared. Consistent late payments may not show on your credit report, but will show when your landlord deposited your checks.

Summary

Mortgage lenders attempt to create verified financial picture of their applicants. This is vital to successful approval decisions. Gathering and preparing these documents before you make application is critical to receiving a fast decision.

Be sure not to exaggerate your income or liquid assets as your lender will find out. When lenders have doubt, they tend to lean toward rejection, not approval, even if you have more income or assets than you originally stated. This information gathered from Alanna Truitt.com: San Antonio Mortgage Brokers


For more details you might want to research specific policies on https://www.consumer.ftc.gov/articles/0189-shopping-mortgage