Buying a home is one of the most exciting purchases you’ll ever make. It’s easy to get caught up in the excitement and forget documentation that you might need to get to the point where you are signing on the dotted line.
Documents prove your identity and provide your financial history so that your lender can adequately process your mortgage loan.
Here’s a short list of documents that you will probably need when pursuing a mortgage loan. Tip: contact your lender for a more detailed list of what they require.
Pay Stubs and Tax Returns
Your lender will want to understand your financial history–especially your recent history. More than likely, your last two tax returns and your most recent pay stubs will probably be enough for them to determine your financial health and assess whether a mortgage loan is right for you.
For tax returns, you will probably need to sign Form 4506-T. This will allow the lender to request your tax returns from the IRS. Pay stubs for the past month will work unless you’re self-employed or have other sources of income. If that’s the case, your lender might want to see some other proof of income such as 1099 documents or proof of direct deposits to your banking account.
Bank Statements and Records of Assets
We’re looking at your financial health yet again, but this time lenders will want to know the current state of your accounts and whether or not you’ve got money invested. Life insurance documents fall into this category as well. Lenders typically want to know that you’d be able to pay your mortgage for a few months with the cash you have on hand.
Your credit report is often used by financial institutions to gauge how likely you are to be able to repay a mortgage loan. Your lender will pull your credit report and will need your written or verbal permission to do so. If you do have blemishes on your credit report, be prepared to give some form of explanation as to why they might be there. Some lenders will be understanding if an incident was unavoidable and not habitual delinquency.
You wouldn’t want someone to finance a home in your name. Identity theft isn’t a joke–and lenders take it seriously. Be prepared to provide a photo ID to prove you are who you say you are. If you’ve got a social security card, it’d be good to have that on hand as well.
Want to know what First Lenders needs when applying for a mortgage loan? Ask us!