Initial Documentation Required for a Mortgage

When you apply for a mortgage, you should have the initial documentation readily available to your broker to analyze your situation, do math, understand your aims. A broker will run your scenario with different banks trying to find lenders that are willing to accept your application, especially on today’s market, choose the best lenders for you, and develop comprehensive mortgage plan that fits into your financial goals. Only then, he will discuss with you available mortgage options and provide the actual rate quote. 

You will need to provide the following documents:

1) Income Documentation – This represents your income and work experience. Banks want you to have 2 years  experience preferably without gaps.
-Explanation letter of job history/gaps/unemployment
-For Employees:
        –Past 2 years W-2 statements 
        –Most recent 30 day’s pay stubs
-For Self-Employed or Commissioned:
        -Most recent 2 years signed federal tax returns
        -Business Certificate/License
        -YTD profit and loss
-For Divorced People:
        -Complete Divorce Decree or Separation Agreement with stipulations regarding payment of child   support, alimony and separate maintenance
        -Verification of Alimony/Child support payments
-For Investment Property Owners:
        -Lease agreements (all rental properties)
        -Most recent 2 years signed federal tax returns

2) Assets Documentation – Available liquid assets for down payment, closing costs, and reserves need to be verified.  Any large deposits on the accounts may also need to be explained. You can present copies of paper statements mailed to you, or online printouts as long as your name and bank are clearly legible on the printout.
-Most recent 2 months statements for checking and savings accounts
-Latest statements for investment accounts (401K, IRA, Stocks, Bonds, etc.) – Will be used 70% of investment value

3) Liabilities Documentation – You will sign Borrower Signature Authorization form that allows a broker to run your credit history. He will calculate your total liabilities and Debt-to-Income (DTI) ratio, check your middle credit score and derogatory trades. Different lenders have different guidelines for DTI.

There might be other documents required for final approval, but the above is a good start.