What Documents Do I need to Get a Home Loan
Mortgage lenders require paperwork that verifies every facet of your financial life: income, debts, assets and more. It may seem overwhelming at some points during the loan process. Do not get discouraged in your journey to Clinton County NY Homeownership! Your friends and family that own real estate have gone through the same thing.
The lender will request the following documents, so gather them before you apply for a mortgage.
- Drivers License and
- Social Security Card
- W-2 forms from the previous two years, if you collect a paycheck.
- Profit and loss statements or 1099 forms, if you own a business.
- Recent paycheck stubs.
- Most recent 2 years federal tax returns
- 2 months of complete bank statements (All pages should be included – If page 1 say 1 of 5… 5 pages are needed in total)
- Name and number of landlord to verify rental payment history
- Asset Verification – Any other asset statements – such as 401k or Stocks and Bonds
Mortgage Documentation - the Profit Statement
Self-employed borrowers may have to submit a current-year profit and loss statement, especially if the year is more than half over or they haven’t filed their prior year’s tax return.
During the housing boom, many self-employed borrowers got loans with little or no income documentation. Those loans are rare now.
Mortgage Documentation - the Paycheck Stubs
Loan guidelines typically specify one month of verified income. You can prove this with paycheck stubs. Employees who are paid electronically may be able to access a corporate website to print out paycheck stubs. Another thing to remember is that the stubs should be current at time of closing. It is likely that throughout the loan process, bank statements and paystubs need to be provided.
Mortgage Documentation - the Tax Returns
You will be expected to provide tax returns, including all the pages and schedules. The returns will be scrutinized for unreimbursed employee business expenses, self-employment business losses and signs of loan fraud, such as reported income that doesn’t match your W-2s.
You’ll be required to sign IRS Form 4506-T, which allows the lender to get a transcript of the tax return from the IRS. It’s not a bluff: The lender will get the transcript of your tax return straight from the IRS and compare it with the copy of the return that you gave to the lender.
Mortgage Documentation - the Cancelled Rent Checks
Often, renters will be asked to supply 12 months of canceled rent checks and bank statements showing that the rent was paid on time. Renters without that documentation can provide the landlord’s name and contact information for payment verification.
For current homeowners, the lender might ask for canceled checks and bank statements showing that the mortgage was paid on time. Any late payments are likely to show up on the credit report, too.
Speaking of the Credit Report
- Accounts listed on your report that don’t belong to you. Often this is mistaken identity; sometimes it’s a sign that you’re a victim of fraud.
- Notations that say an account is open, when you have paid it off and closed it.
- Incorrect details regarding credit limits, amounts owed, account opening dates.
Other Home Loan Documents You May Need to Provide
- Clinton County Home sale contract, including the purchase price.
- Proof that a gift isn’t a loan.
If you receive a cash gift or grant toward your down payment, you’ll have to provide a letter from the giver that declares that the gift isn’t a loan. The lender might even want a canceled check and the giver’s bank statement.
- A lease agreement, if you’re renting out your former home.
- Proof of rental property income.
- If your income includes rents from investment property, it needs to show up on your tax return. Canceled rent checks and bank statements showing those deposits might be OK if the property was purchased in the current calendar year.
- Proof of a child’s age if child support is counted as income.
- Bankruptcy discharge papers.
- A copy of a divorce decree might be requested in some cases
Home Loan Documentation Tips
When asked for documents, provide them promptly. Never cross out, white out or alter any information on a document. “If you white out anything, it’s not a valid document for lending purposes.
Always provide every page of every document — even the pages that say “This page is blank.”
Finally, remain ready to supply updated documents. Documents do expire so if Plattsburgh homebuyers take a long time in their house-hunting effort, we won’t need the whole thing again, but they will have to bring the most current paycheck and bank statement.
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