During the mortgage application process, your lender will ask you to provide a variety of documents and paperwork relating to your income, assets and debts. They use these documents, among other things, to verify your ability to repay the loan.
The process will go more smoothly later on if you provide all of the required documents up front. If this does not happen, the loan could be delayed during the underwriting stage due to a lack of documentation.
As a borrower, you must do two things:
- Ask your lender for a complete list / checklist of required mortgage documents and paperwork.
- Provide all of the required paperwork in a timely fashion, to avoid unnecessary delays.
Chances are, the lender will provide you with a detailed list of documents needed for application, underwriting and final approval. But it never hurts to ask in advance. If nothing else, it will give you a head start in rounding up those all-important loan docs.
Checklist of Commonly Required Mortgage Documents
Here’s a checklist of paperwork commonly requested during the mortgage application process:
- A signed and completed “Uniform Residential Loan Application” (Fannie Mae Form 1003, or Freddie Mac Form 65).
- IRS W-2 forms (Wage and Tax Statement), typically for the last two years. Copies are acceptable in most cases.
- Paycheck stubs showing year-to-date earnings. Some lenders require the most current paycheck stub covering the last 30 days. Others want to see two months worth.
- Copies of bank account statements (checking and savings) for the last two or three months. These documents are used to verify your assets and cash reserves.
- IRS form 4506-T, Request for Transcript of Tax Return. This document allows the lender to obtain your tax returns directly from the IRS, for income verification.
- Copies of quarterly or semiannual statements for CDs, IRA, money market fund, 401(k), etc. These are used for asset verification.
- A copy of the real estate purchase agreement / sales contract (later on, when you actually have one).
- Employment history for the last two years.
- A copy of your Social Security card, and probably your driver’s license as well.
Note: This is only a partial list of the most commonly requested mortgage documents. Your lender should give you a complete list / checklist of paperwork required to originate, underwrite and approve your loan.
Additional Paperwork for Self-Employed Borrowers
If you are self-employed, the lender will probably request some additional paperwork during the application process. Additional mortgage documents required for self-employed borrowers may include the following:
- Tax returns for the most recent two years, including any schedules such as the K-1 (“Partner’s Share of Income, Deductions, Credits”).
- A copy of your profit and loss (P&L) statement with any related balance sheets.
- A copy of your corporate/partnership tax returns for the last two years, if applicable.
- Copies of any 1099 forms relating to your business.
Special Circumstances and Loan Scenarios
The document checklists above apply to typical borrowers using standard mortgage products. Borrowers with special circumstances, or those using a specialized type of loan product, may need to provide additional mortgage documents.
Some examples:
- A borrower who has been divorced in the past will probably have to provide a divorce decree.
- Someone applying for a VA loan will have to provide a certificate of eligibility issued by the VA.
- Those seeking an FHA loan must also complete HUD Form 92900-LT, “FHA Loan Underwriting and Transmittal Summary.”
Original Documents vs. Copies
Do mortgage lenders need original documents or copies? This is another common question among first-time home buyers. In most cases, copies will suffice. For example, you obviously wouldn’t want to give a lender your actual Social Security card.
Bank statements are merely printouts, so it doesn’t matter if they are copied over and over again (as long as they are legible). The same goes for most of the other documents required during the mortgage process.
Tax returns are different. You probably won’t give copies of your tax returns to the lender. They will likely request them directly from the IRS, using the IRS Form 4506-T mentioned in the checklist above.