Loan Application Documents
Lenders are looking for you to verify your financial situation, so they’ll ask for a variety of documents. Not all lenders ask for exactly the same paperwork, but if you have copies of everything on this list, you should be covered.
Income:
- At least 1 full month of paystubs showing Year-To-Date Earnings
- Previous two year’s W-2s
- Previous two year’s income tax returns
- For self-employed borrowers, the lender will require all schedules so they can see any commission, dividend and rental income
- Copies of any social security, pension and/or retirement award letters
- Previous two month’s bank statements for all accounts with all pages attached
- Current month’s statement for any investment accounts
- Proof of alimony or child support if claimed as income (usually this is in the divorce decree)
Gift Letter:
- If funds for the down payment are coming from a gift, you will need what is called a gift letter documenting this, and also statements showing the gift amount successfully transferred into the borrower’s account
Credit/Debts:
- Any bankruptcy and discharge paperwork
- Written statements explaining and credit discrepancies: they will run a complete credit report, and if problems are found, you’ll need to write up your side of the story (so it’s best if you do this long before they do, and fix the problems so your report is clean by the time you apply for a loan)
- An estimated value of any other major assets
- Any outstanding debts not listed on credit report
Administration:
- Copies of your driver’s license and Social Security Card
- Your address(es) for the last two years
- If you are currently renting, you will need to provide:
- Name, address and phone number for your landlords for the previous two years
- Your employer and salary information for the previous five years
Final Loan Documentation:
That’s generally enough for the pre-approval, for the final purchase loan, you may also have to provide copies of:
- The sales contract with listing and buying agent contact information and the amount of earnest money you have put down
- Appraisal, inspection, escrow account information, evidence of clear title and homeowner’s insurance for the new property
- For some condominium projects, the lender may require a copy of the CC&Rs or other governing documents
No or Low Documentation Loans:
It is possible to borrow money to buy a home without providing all of the above information. Lenders realize that there are many potential customers out who either don’t have, or don’t want to produce this level of verification.
You may pay a slightly higher interest rate (to help compensate the lender for taking the bigger risk on someone who doesn’t verify everything above), but there is nothing strange about doing it this way. If you are interested in this, ask your mortgage broker or lender about a No Doc or Low Doc loan to see if you qualify.