Mortgage Documentation Requirements

What Do I Need to Document My Loan Application?

Mortgage Documentation Requirements
April 22, 2014

Thanks to the new Qualified Mortgage rules from the Consumer Financial Protection Bureau (CFPB), the necessary documents for mortgage loan applications are on the increase. Lenders are heavily scrutinizing every aspect of assets, debts, and regular income to better assess the ability to repay – ultimately a good thing, but annoying if you are in the process. It may seem like the only things left for lenders to ask for are DNA samples and a pint of blood!

The list below should cover the requirements of any lender. Not every lender requires all these items, but they will require most of them – so check with your lender for their specifics.

  • Identification/Basic information – A photo ID, Social Security numbers or tax ID numbers for all purchasers, and all home addresses for the previous two years.

  • Account Information – Bring information related to all cash accounts and investments – checking, savings, money market accounts and Certificates of Deposit, IRAs, 401(k) accounts, and any other investment vehicles you may have. You need names, account numbers and balances for all accounts. They may also want the address of your bank's main office and your branch.

    Typically, cash accounts like checking and savings accounts will be scrutinized over the past three months, especially for unusual deposits that could be undeclared gifts or back door loans. If you do have a declared gift as part of your down payment or closing costs, you need to furnish a letter from the gift-giver verifying that the money is a gift not to be repaid and is not a loan.

  • Income/Job Verification – Bring your most recent W-2 form, and pay stubs or similar receipts from the past few months – two months at least. Some lenders may ask for verification of employment from your employer (such as a letter dated and written on company letterhead).

  • Tax Returns – Bring copies of your Federal tax returns for the past two years. You can get copies from the IRS via their website, or by filling out IRS Form 4506-T, "Request for Transcript of Tax Return".

  • Miscellaneous Income Evidence – Anything related to a regular income stream that was not covered above. Examples are orders of child support, rental property income, and Social Security benefits.

  • Additional Properties – For any other homes or properties, bring mortgage statements, any lease agreements, management company contacts for condominiums, and insurance contacts for all properties. Include insurance information for your home to be purchased.

  • Self-employment Documents – If you are self-employed, you will need to bring your balance sheet and 1099/K1 forms, and any relevant business tax returns in addition to your personal tax return.

  • Debt Summary – Bring all credit card information and statements with balances, and balances and payment records for any outstanding loans such as student loans, car loans, or any other outstanding installment payments. Include divorce settlement papers if they are relevant to alimony (as either debt or income).

If you are ready to purchase on an accepted offer, you will also need the signed purchase contract and the contact info of your attorney, insurance agent, Human Resources rep if employed, or CPA if self-employed. For a refinancing, substitute "mortgage statement" for "signed purchase contract" above.

Never leave out a page of any record even if it is blank, and never whiteout or obscure part of any document.

All this may seem excessive, but each item is important – so be sure to check with your lender. Do not make them send you off for a missing piece of information at the last minute that delays or craters your mortgage approval. Be ready with everything described here; otherwise, it could cost you your dream home.

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