What Documentation Will I Need?
January 26, 2022
When you’re buying a home, gathering the paperwork for your mortgage before you apply is a good idea. Tracking down documents can take time but doing it before you need them could help you get to the closing table faster.
A mortgage application typically requires a paper trail to verify:
Here’s what you will need as proof of income:
· W-2 forms. Your mortgage lender will likely ask for W-2s from the last one to two years for each applicant. If you don’t have them, check with your employer or ask the IRS for copies of the documents you submitted with your tax returns.
· Pay stubs. Lenders typically ask for pay stubs from the last 30 days and may require your employer to sign them. Pay stubs may be available in paper or electronic form. If you receive other types of payments, such as overtime or commission, you’ll also need to produce documents for them. A W-2 form or pay stub may show how much you’ve earned for this income.
· Income tax returns. Lenders will check your tax returns from the last two to three years to verify the income you reported and the deductions you claimed. You might need to provide copies of the returns along with IRS Form 4506-C, which permits the lender to obtain your tax transcript.
· Alimony or child support documents. If you rely on this type of income, then you must show proof that you will continue to receive payments for at least three years after the date of the mortgage application. A copy of the court order may be acceptable.
For self-employed workers, freelancers and independent contractors, most lenders require at least two years of steady self-employment in the same industry. You can show this with contracts or letters from current clients, or if you own a business, you can provide your business license or proof of insurance. The lender may ask for at least two years’ worth of federal tax returns, both personal and business, plus a cash-flow analysis form and a year-to-date profit and loss statement signed by a certified public accountant.
Other records you may need to submit: