When you apply for a mortgage loan and get a pre-approval based on your credit report, the next step is to gather necessary documentation as required by the lender. The loan officer works with a processor who requires proof of your financial situation to close the loan. The exact documentation required by the lender may vary, but a few documents are common for just about any mortgage loan.
Pay Stubs or Proof of Self Employment
One of the first documents you'll have to give your new lender is proof of income. You can send the lender pay stubs for the past month (or longer depending on the lender's exact requirements) to prove that you have a job making what you claim on your application. If you're self-employed, be prepared to gather a variety of different documents to prove that status. That may include deposited checks from clients and statements from your credit card merchant accounts, if applicable.
You must also give your lender bank statements for checking and savings accounts in your name. The statements show your account number, deposits, deductions and your average balance on each account. You may have to provide statements for a couple of months to a year or more depending on the lender's request. One of the most common reasons why a lender requests bank account statements is to verify that you have the minimum amount needed to place a down payment on the home.
Other Asset Statements
The lender may also request statements of all other assets you own, including stock investments, bonds, CD (certificate of deposit) accounts and retirement accounts. In short, you should be prepared to provide a statement for any asset you list on your mortgage application. That may also include tangible assets, like vehicles and other real estate property you own. You may also have to provide a copy of the title or deed to certain assets.
Another common set of documents you have to provide to a lender to close a mortgage loan are your tax returns from previous years. The lender commonly requests tax forms for the past two or three years. A tax return provides the mortgage company with a snapshot of your financial information, including income, deductions and expenses, that the lender needs to process and eventually close your loan.
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