Recently, With the growth of the tech world, we see continual migration from the former paper system to the paperless system we now enjoy today. Every industry is finding ways to adapt to the “new normal” and improve its services. However, the housing industry is not left out of this development as some documents that used to take ages to assemble can now be submitted online without much bureaucracy. A few years ago, the process of verifying a mortgage loan application didn’t use to take so long. Further requirements were not needed to verify a borrower’s income, expenditure, and other liabilities.
Besides, according to Mark Zihmer, the vice president in charge of Mortgage Lending at CrossCountry Mortgage, the housing industry has repositioned itself to correct mistakes made in the housing crash. Now, borrowers are verified to ensure that only qualified candidates receive loans. Indeed, this development has increased the number of documents required for verifying a borrower’s financial state.
Thus, to help speed up the process of getting your loan application verified, we have compiled the complete list of documents you’ll need. Collecting these documents before the processing will save you a lot of time and stress.
Here are the list of documents you’ll need for mortgage:
- Income verification
- Credit verification
- Mortgage application information
- Assets and debts
- Other records
Meanwhile, each of these categories of documents has several documents attached to them. Here is the list of documents per category:
The objective of requesting these documents is to ascertain how stable your income is. Besides, stability in your income and consistency is what mortgage companies will be looking out for here. Hence, here are the documents needed in this category.
- W-2 forms for the past 2-3 years.
- Pay stubs on earnings for the past 30 days.
- Income tax returns on taxes and deductions for the past 2-3 years.
- The 4506-T form from IRS. This form should be dated and signed.
- For self-employed business people and freelancers, you’ll need to provide a most recent profit and loss statement, income tax returns, and a complete list of debts.
You won’t need to submit any documents on this. You’ll, however, have to permit the lenders to check your credit level. It helps them calculate a credit score. The credit score influences the interest rate you’ll get if you obtain the loan.
Mortgage application information
This application is a way of showing proof of your details and your financial state.
- Details about the type of mortgage you’re applying for.
- Basic identification information about the house and borrower.
- Employment history for the past two years.
- Monthly income report.
- A complete list of assets and liabilities,
- Declaration on any pending legal issue.
- Your clear signature.
- Identification issued by the government.
Assets and debts
- A statement on every detail is listed on the application. The statements should be from the past three months.
- Documentation for every large sum of money in your account.
The list of documents may vary from city to city and from various lenders. Before starting the application process, do well to ask the lender for the complete list of documents that will be needed.