What Do Lenders Typically Require To Process A Mortgage

What Do Lenders Typically Require To Process A Mortgage

Mortgage lenders require credible documents for them to know whether you are creditworthy. The documents will verify every aspect of your financial life which includes income, assets, and debts.

The following are the basic documents you will need when you are applying for a mortgage:

• A. Bank Statements
  

  You will provide bank statements showing your financial transactions for at least three months before the date of application. If you have a savings account, present a savings account statement to the Mortgage Company or broker to increase your chances of getting a mortgage.

• B. Lease or Rental Verification
  

  The Mortgage Company will ask for the current lease or a rental verification form signed by the landlord. The Mortgage Company will contact the landlord to find out how you pay rent.

• C. Paycheck Stubs
  

  Banks and mortgage companies request for copies of pay stubs. If you run your own business, the companies will ask you to provide more documents showing your income such as profit and loss statement.

• D. Verification of Employment
  

  Bank will ask borrowers to provide the most recent Form W–2 wages and tax report. Your employer will fill the form and indicate the salary you earn, the period you have been working, your current position, and whether there is a chance for a raise.

• E. Tax Returns
  

  Borrowers also present their tax returns. Different lenders request for a tax return report covering different periods starting from one year to three years. The tax returns have to include all pages and schedules. These documents help in scrutinizing for loan frauds and business losses.

  The lender will request you to sign IRS Form 4506-T. It allows them to apply for a transcript of your tax returns from IRS. The lender will then compare it with the copy you gave them.

• F. Income for Retirement
  

  Lenders require retired borrowers to present a proof of their retirement earnings.

• G. Home Sale Contract
  

  Relevant authorities must sign the contract. The lender uses this contract to determine if your request is genuine since it includes the purchase price.

• H. Credit Report
  

  The Mortgage Company or bank will scrutinize your credit reports to know if you pay your debts on time. Make sure all accounts on your credit report are correct. Also ensure the details in the report are accurate, including credit limits, open accounts, and the amount owed.

• I. Documents Showing Assets You Own
  

  After submitting your bank statement, the lender will request you to disclose your other assets. The lender wants to know whether you will have enough money to pay for unexpected expenses which may arise after you pay a down payment and the closing costs.

  Banks and Mortgage Companies provide mortgage refinancing services. Those who want to refinance their mortgage will have to present the following documents to the lender:
  Document showing the recent mortgage
  -Paystubs
  -Statement of Assets
  -Statement of Debts
  -Credit Report
  -Tax Returns and W-2s
  

This article highlights basic documents. The lender may require other documentation depending on the situation.