Depending on your unique situation, here are five basic documents you might need when applying for a home loan.
- Tax returns
Mortgage Loan Officers want to get the full story of your financial situation. You will most probably need to sign a form 4506-T, that allows the loan officer to request a copy of your tax returns from the Internal Revenue Service (IRS).Mortgage Lenders generally want to see one to two years of your tax returns. This is to make sure that your yearly income is consistent with your reported earnings and there aren’t significant fluctuations from year to year.
- Proof of income - Pay stubs, W-2s or other
Mortgage Lenders may ask to see your pay stubs from the past few months. Your tax returns help give the loan officer an idea of your overall financial health, on the other hand pay stubs help them understand your current income. If you’re self-employed or have other sources of income (examples: child support, rental properties, ect.), you may need to show your loan officer a proof through 1099, direct deposits or other.
- Bank statements and other assets
When assessing your risk profile, a mortgage loan officer may want to look at your bank statements and other assets. Such as your investment assets as well as your insurance, such as life insurance and other.Loan officers typically request these documents to make sure you have several months of reserve mortgage payments in your account. They also want to check if your down payment has been in your account for at least a few months and did not just show up out of nowhere.
- Credit history
In order to understand your financial history as a borrower, lenders usually pull your credit report, with your verbal or written permission.You may need to explain any blemishes on your credit report. That might include a previous short sale or a foreclosure.
- Photo ID
You’ll usually need to provide a photo ID, such as a driver’s license. This is to prove you are who you’re claiming to be.
This is the basic list of documents that are usually required to start the process, however depending on your particular situation you might need more or less.