It’s no secret that getting a mortgage is no walk in the park. Whether you’re a first-time home buyer or a repeat borrower, applying for a home loan is a long and crucial process.
As borrowers, there are certain documentations that lenders usually require. Usually, the paperwork would serve as their guide to verifying your financial ability to carry out a mortgage. And in order to see that, lenders would typically require you to give them a number of documents to prepare.
Officially called the Wage and Tax Statement, W2 forms report wages paid to an employee as well as the tax withheld from them.
In general, some borrowers would need to see forms from the jobs you kept in the past two years prior to your application. But sometimes, the most recent W2 form would suffice.
Other than your wage and tax statement, lenders would also verify your income through your paycheck stubs.
When getting a mortgage, lenders typically require them for at least 30 days. Current pay stubs will help your lender verify that you have been earning the same amount.
Letter of Authorization
Sometimes, lenders would require a written letter of authorization. But at times, verbal authorization is fine.
This is created for the purpose of giving your lender the authority to run your credit report. Your credit report will show your credit score, any possible tax lien or other derogatory credit records.Want to get started on your application? Ask our lenders!
Lenders will determine that you’re earning enough to pay the monthly mortgage that you’re set to pay.
Through tax returns, they will see that you have enough money for a mortgage and see the stability of your income. In general, they would require your personal federal tax returns for two years back.
For self-employed individuals or owners of more than 20% of a company, all pages of your business federal tax returns two years before the application would be required.
Through employment letters, your lender would be able to verify your employment history. The letter would confirm your hire date, your salary, and your current status of employment.
This would also verify if there are gaps in your employment, like a maternity leave, and that, despite the time off, you are set to continue as a permanent employee.
Statements of Personal Assets
In almost every mortgage program, lenders would also try to look into your personal assets. Your personal assets would generally include your bank account statements for both your checking and savings account. Your lender would probably look into your investment and retirement account, too.
Any debt that’s not in your credit report would most likely be looked into as well. These are usually any possible student loans, other existing mortgages, credit card statement and the like.
These documents should include your creditor’s name, essential information like your address and account number, your monthly minimum due and outstanding balances. Other statements might be needed like child support, alimony, and other fixed obligations.
If you’ve been renting for the past two years, records of your rent payment are generally required.
For those who have an existing primary residence, tax figures and all mortgage insurance might be looked into by your lender when getting a mortgage.Thinking about getting a mortgage? The first step begins here.