1- Proof of Income
Every lender will need to verify the income that was listed on the application. This includes employment, rental and retirement income. They will also verify income that is received from stocks or annuities. Typically a mortgage lender wants to verify the two most recent months of income.
2- Tax Returns
Many lenders will ask to look at your tax returns when you are applying for a mortgage. Tax returns are usually collected if the mortgage applicant receives rental income or is self employed. Tax returns are also used to verify tips, commission and bonus income. It is wise to gather your two most recent tax returns during the mortgage application process.
3- Proof of Assets
Just as a mortgage lender verifies income, they also verify the assets you listed on your application. This includes any assets in checking or savings account, various stocks, individual retirement accounts and 401k’s or any other investments listed on the application. You should collect your 2 most statements for all assets listed on your mortgage application.
4- Written explanation of credit
Most mortgage lenders will want to collect an explanation for any credit inquiries, delinquencies or collections that are listed on your credit report. They may require that you divulge the circumstances that attributed to the collections or delinquencies. Also, they may want details on any inquiries within the last 6 months. Ask your mortgage professional if you should write a letter to explain each credit inquiry listed on your credit report.
This list gives you a heads up on what you may need to gather for your mortgage loan. Be proactive in collecting the appropriate documentation to ease the loan application process. Keep in mind that each lender has different guidelines and each borrower has different circumstances. Speak with your mortgage professional about what documentation is required for your loan.