Checklist of Documents You’ll Need for a Mortgage

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If you're applying for a home loan, your mortgage lender will want to take a deep dive into your financial life. This is to ensure that you meet all of their underwriting guidelines and are in the position to easily afford your new mortgage payment. Throughout the approval process, you can expect to be asked for documents that substantiate different aspects of your income, work status, expenses and more. It's little wonder that it can take up to 60 days to complete.

Getting your paperwork organized in advance is a great way to streamline the process and improve your odds of getting approved. Here we take a closer look at the supporting documents you'll need if completing the uniform residential loan application (URLA). It's the form most lenders use to determine a borrower's mortgage eligibility.

Income and Assets

This section of the application demonstrates your ability to repay your loan. Your lender will zero in on your past and current job situation, including how long you've been at your job, and will likely verify your answers with your employers. Beyond that, you may be asked how long you've been working in your industry. Whether you work for an employer or for yourself, most lenders will want to see steady income for a minimum of two years.

Your gross monthly income is an important number. This represents your earnings before taxes and other deductions are taken out. While your pay stubs and W-2s may reflect this, you may also be asked to provide bank statements to substantiate any other incoming funds—especially large amounts. This is to ensure that you aren't borrowing money for your down payment. If you are, this amount will count toward your debts. (More on this shortly.) If money is being gifted to you, the person providing it will have to complete and sign a gift letter supplied by the lender.

If you're retired or living on passive income, you'll still need to demonstrate that your income is reliable. Be ready to provide proof of retirement account balances, Social Security documentation and any paperwork related to annuities or pensions that you draw on for income. This includes any income generated by rental properties, capital gains and dividend stocks.

Documents You'll Likely Need

For all borrowers listed on application:

  • Recent pay stubs
  • W-2 forms from the past two years
  • If self-employed:
    • Year-to-date profit and loss statement
    • Documents to show unpaid accounts receivable
  • 1099 forms from past two years
  • Bank statements for all your checking and savings accounts
  • Statements for all investment accounts, including:
    • 401(k)s
    • IRAs
    • CDs
    • Brokerage accounts
  • Accumulated cash value from life insurance, if applicable
  • Down payment gift letters, if applicable
  • Alimony and child support, if applicable
  • If you have income from a rental property:
    • Documentation of rental income
    • Copy of lease
    • Property appraisal report

Spending, Expenses and Debts

On top of your income, your lender will also want to understand your financial liabilities. After all your bills are paid, how much is left over each month to put toward a new mortgage payment? You'll be asked to list out all of your debts, as well as expenses like child support and alimony you may provide.

Documents You'll Likely Need

For all borrowers listed on application:

  • The company name, account type, account number, unpaid balance and monthly payment for all liabilities, which include:
    • Credit cards
    • Student loans
    • Personal loans
    • Auto loans
    • Medical bills
  • Any paperwork that documents monthly child support or alimony you provide
  • Proof of monthly job-related expenses, if applicable

Miscellaneous Documents

Mortgage lenders care most about your financial health, but they'll also want to verify other important details. Having the following documents ready to go can expedite your application process.

Documents You'll Likely Need

For all borrowers listed on application:

  • Copy of your driver's license
  • Copy of your Social Security card
  • Rental history, including contact information for previous landlords
  • Immigration paperwork, if applicable
  • If you own another property, you'll need to provide the:
    • Address
    • Property value
    • Status of property
    • Intended occupancy (the purpose of the property, such as a second home, rental property or investment property)
    • Monthly expenses related to property
  • If you own a property with an outstanding mortgage, you'll also need to provide the:
    • Lender name and account number
    • Type of loan
    • Monthly payment amount
    • Unpaid balance on the loan
    • Credit limit, if applicable

Credit

You won't need to provide your own credit reports or credit scores when applying for a mortgage (your lender will pull those themselves). However, going over them before submitting any mortgage applications is vital because it clues you into what potential lenders will see. You can get a free copy of your credit report from all three consumer credit bureaus at AnnualCreditReport.com. You can also check your credit report and credit score for free with Experian. Doing so allows you to get ahead of any potential roadblocks in your path. These may include:

  • Past-due accounts
  • High account balances
  • Fraudulent activity or information you believe to be inaccurate

In some instances, your mortgage lender may ask you to provide a letter of explanation. This document gives you the opportunity to expand further on areas of your mortgage application that raise red flags for the lender—like credit issues. If there are any derogatory marks on your credit report, your letter of explanation may quell their worries. Now is the time to briefly explain what happened and when, hopefully providing reassurance that the issues are behind you.

One problem may be a lack of credit history. If you have a thin credit file (few credit accounts on your credit report), your lender may suggest an FHA loan over a conventional loan. FHA loans, which are backed by the federal government, allow for credit scores as low as 580 with a down payment of 3.5%. If you can put down 10%, you may be able to qualify with a credit score of 500. For a conventional loan, the minimum credit score is typically 620.

The Bottom Line

You'll probably need to gather up a variety of supporting documents when applying for a home loan. On top of that, it's helpful to have access to the type of FICO® Scores that mortgage lenders generally use—something that's available with Experian CreditWorks℠ Premium. You may ultimately find you're better off waiting and taking the time to improve your credit before you submit any mortgage applications. Taking this route could open the door to better loan terms and lower interest rates.

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