Paperwork You Need When Buying a Home

by Doris Arnold 10/13/2020

Photo by Andrea Piacquadio from Pexels

While the home buying process is exciting, applying for a mortgage can be time-consuming. Paperwork is a big part of the mortgage process and the better prepared you are, the more likely it is to go well. In fact, if you are considering getting preapproved for a mortgage, lining the paperwork up ahead of time will be very helpful. Remember, the more information provided to your mortgage lender, the easier it will be for them to get your approval. There are three categories of documentation your lender will want to see, income, expenses, and assets. Here are the documents they will likely require:

Verification of Income

Mortgage lenders will typically verify the income you are claiming in two ways. First, they will want to see your most recent Form W2 or Form 1099 (if you are self-employed) and they will generally ask you to provide tax returns. While some lenders will accept signed copies of your tax returns which you provide, many will also use the IRS income tax verification process to ensure what you are providing is the same as the forms filed with the IRS.

You should be prepared to provide at least a month’s worth of pay stubs to a mortgage lender. Keep in mind, in most cases, overtime pay, bonuses, and other “extraordinary” income will not be counted as part of your gross income by the lender.

Verification of Expenses

Your mortgage lender will need to verify your expenses. Since your mortgage application will ask you to list your debt, you should consider getting a free copy of your credit report for two reasons. First, the information on your application will be accurate, and you can verify the data contained in the report is correct. Should there be any errors, you should take the opportunity to have them corrected.

Your mortgage lender may also want to verify your rent payments for at least the last year. You can provide a copy of the checks used to pay your rent, although the lender may ask you to sign a form allowing them to verify your rent independently of any documentation you provide.

Verification of Assets

You may also be asked to provide verification of certain assets. For example, if you have a stock portfolio, IRA accounts, or other liquid assets, the lender may ask you to provide the most recent statements from the custodian of those accounts. Your mortgage lender will let you know what additional information they may need.

This list is not intended to be a comprehensive list of the documents your lender may request. Chances are you will also be asked to provide a copy of your driver’s license or other photo identification. Borrowers who have part of their down payment given to them as a gift may also be required to provide a gift letter indicating the funds were a gift and not a loan. The better prepared you are for the mortgage process the faster it will go.

About the Author
Author

Doris Arnold

Real Estate is, if nothing else a people business. For me as a leading real estate professional, my work is not so much about buildings, contracts and inspections; it's about people, their dreams, aspirations and the most important place in their world- their home. I am a people person through and through. Simply put, people fascinate me... spend a few minutes with me and you can sense this unique attribute. I listen intently to you and most importantly, I have a genuine interest in what you have to say. Follow me around for a day and you will witness the powerful and positive effect I have on the people around me, whether it's my family, close friends, or a community acquaintance. Undoubtedly, you will see a caring and committed woman who makes a difference in people's lives. If you ask my past clients what they liked about working with me, some would say it was my business savvy and real estate expertise that impressed them, but most of them would comment on how much I cared about them. I really listen to what my clients want and do what I can to anticipate their needs. I always try to stay one step ahead and keep in constant contact. My clients know I am always working for them to keep them informed and up-to-date, and I have a highly organized way of walking my clients throughout the process of buying or selling their home that makes them feel confident nothing will slip through the cracks. I absolutely love what I do and I can tell you "I'm in The Business of People." What that means to me is that I have the privilege of helping my clients achieve their dreams. What that means to you is that you can count on me to care about what matters most to you because I make your real estate needs my top priority.