Get a Head Start: Documents Needed to Apply for a Mortgage

Get a Head Start: The Documents You Need to Apply for a Mortgage

One of the most stressful aspects of applying for a mortgage is simply compiling all the documents you need. The sheer amount of time this process takes can really drag out the loan application process if you aren’t prepared. Here are the most important documents you’ll need when applying for your mortgage. Get these together now to make the mortgage application process easier.

Income Verification

Income verification is one of the most important parts of a mortgage application. Usually, this includes several documents. If you are self-employed, you will need to show your income through something like a 1099 form or a direct deposit. A profit and loss statement and a list of your business debts will also help a lender understand your financial situation.

If you're employed by another party, W-2s and pay stubs should do the trick. You’ll want the pay stubs to go back in time at least 30 days and W-2 forms to go back at least two years. These documents show your lender that your financial situation is stable.

Tax Returns

Tax return documents are also essential to give your lender a full picture of your financial situation. You should expect to sign a Form 4506-T which gives the lender permission to ask the IRS for a copy of your tax returns. Most lenders will want two years’ worth of returns when applying for a mortgage.

Bank Statements

If you have investments, your lender will need to know about them. This shows that you have adequate savings to help you with your down payment and your mortgage payments. Lenders want to see what you currently have in your accounts, including insurance and life insurance assets.

Alimony and Child Support

Employment may not be your only source of money. If you’re receiving alimony or child support, you’ll need to show the lender documents proving this. Alimony and child support payments could be the difference between you getting and not getting your mortgage approved.

Credit Documents

The lender will usually request a credit report. To do so, they will need your permission, sometimes in writing. If you have a bad credit history such as a short sale, late payments, or a foreclosure, you need to be prepared to offer an explanation in writing. 

The goal of this is to make the lender feel better about the risk of lending to you. If you have a bankruptcy is in your past, you will need bankruptcy/discharge papers. If you have multiple bankruptcies, you'll need one document for each.

Renting History

If you’ve only rented up until now, showing that you’ve paid your rent on time is a great way to show your reliability to your lender. Provide your lender with documents of your renting history to show that you have consistently made on-time payments. 

Gift Letters

Sometimes your loved ones may want to help you purchase your home. If you’ve gotten any of these gifts, you’ll need letters from each person explaining their gift. They should include their relationship to your and confirmation that the money is merely a gift and does not need to be paid back.

Apply for Your Mortgage with the Carolina Mortgage Team at Revolution Mortgage

All of this can definitely seem overwhelming. But when you are working with a lender who is helpful and trustworthy, it will be an easier process. The Carolina Mortgage Team at Revolution Mortgage will make sure you have all the documents you need. Feel free to ask as many questions as you need to. We are here to support you through the mortgage application process!

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