If you’re planning on buying a home with a mortgage, you can expect substantial paperwork during the mortgage application process.
This paperwork helps lenders verify important information about you, such as your income history and overall financial stability. If you begin gathering important documents several months before applying for a mortgage, it can help make your mortgage process faster and less stressful.
Here are six documents you should begin gathering several months before applying for a mortgage:
Make sure you and your spouse (if you’re married) have a current, unexpired government-issued photo ID. This is most often a driver’s license.
Tax returns plus W-2’s and/or 1099’s from the last two years
Giving your mortgage lender copies of two years’ worth of federal tax returns proves your stable employment history and salary. Also, gather copies of your previous two years’ W-2s or 1099s from all employers
Two months worth of recent pay stubs
While tax returns prove that your income was stable over the last two years, recent pay stubs show that you’re still earning the same amount.
A letter from your employer confirming your hire date, employment status, and salary are necessary. Employment letters can also explain gaps in your employment, such as time off without pay for the birth of a child.
Financial statements from the last two months
In addition to proving stable income and employment, your lender needs to verify that you have enough money to cover your home’s down payment and closing costs. They also want confidence that you won’t be financially struggling after your home purchase and have funds to cover a reasonable financial emergency. You can request these statements from your bank or print them from an online online banking.
If you recently received a large check, such as a gift from a family member to help with your down payment, your lender may require a letter from that person explaining that the money was a gift and you’re not required to pay it back. If you deposit more than $500 dollars into an account that is not from your employer, you must be able to show where the money came from.
Proof of on-time rent payments, if you’re a first-time homebuyer
If you’re a first-time homebuyer and have been renting, your lender will require 12 months of canceled rent checks or 12 months of bank statements showing your rent checks cleared on time.
Begin gathering documents before applying for a mortgage
Because the mortgage process involves many parts, gathering the proper documentation in advance can make your experience easier and less stressful. These are only some of the documents needed for your mortgage application, and your loan originator will provide you with a complete list of any additional documents needed.
If you have questions about the mortgage application process or are ready to get started, contact one of Open Mortgage’s friendly loan originators.