What Documents Do You Need When Applying For A Loan
Applying for a mortgage does not have to be complicated. One of the best ways to keep the process moving smoothly is to have the necessary financial documents available early in the process.
At Capital Funding Mortgage, we help borrowers understand exactly what documentation may be needed and, more importantly, why it is being requested.
Every mortgage is different. The documents required can vary depending on whether you are salaried, self-employed, retired, purchasing a home, refinancing, or using a particular loan program. You may not need every document listed below.
When you apply for a mortgage, the lender generally needs to verify four basic areas:
The purpose is to determine whether your income, assets, credit profile, and the property meet the requirements of the mortgage program for which you are applying.
You will generally need to provide valid identification.
Common documents include:
Your lender may request additional identification depending on your individual circumstances.
If you receive a regular paycheck, you may be asked to provide:
In many cases, the lender will also verify your employment directly with your employer.
Income that fluctuates may require additional documentation because the lender may need to establish a history of receiving it.
Depending on the circumstances, this could include:
The lender will determine whether this income can be considered stable and likely to continue.
Self-employed borrowers frequently require more documentation because income may not be as straightforward as a regular salary.
You may be asked for:
Depending on the loan program and your financial profile, additional documentation may be required.
Being self-employed does not mean you cannot qualify for a mortgage. It simply means that your income may need to be analyzed differently.
Lenders may need to verify that you have sufficient funds for your:
You may be asked to provide recent statements for accounts such as:
Statements should generally include all pages, even pages that appear blank or contain only disclosures.
One area that sometimes surprises borrowers is a request to document a large or unusual deposit appearing on a bank statement.
The lender may need to determine where the money came from.
Examples could include:
If documentation is required, we will help explain what the lender is requesting and why.
Some mortgage programs allow a family member or other eligible donor to provide money toward the down payment or closing costs.
When gift funds are used, the lender may require documentation such as:
Gift requirements vary depending on the mortgage program.
If you are buying a home, you will normally need to provide a copy of the fully executed Agreement of Sale.
Other property-related documents may include:
Many property-related documents are obtained directly by the lender, title company, real estate agents, or other parties involved in the transaction.
When refinancing an existing mortgage, you may be asked to provide information regarding your current property and mortgage.
This can include:
Additional documents may be necessary depending on the type of refinance.
Borrowers receiving retirement income may be asked to provide documents such as:
The documentation needed depends on the type of income being used to qualify.
If you own rental real estate and are using rental income as part of your mortgage application, documentation may include:
How rental income is calculated can depend on whether the property is currently rented, recently purchased, or reported on previous tax returns.
When alimony or child support affects the mortgage qualification, additional documentation may be necessary.
Depending on the circumstances, a lender may request:
Not every borrower receiving support must use that income to qualify.
Past financial difficulties do not automatically prevent someone from obtaining a mortgage.
If you have had a bankruptcy, foreclosure, short sale, or other significant credit event, the lender may request documentation such as:
Different mortgage programs have different waiting periods and qualification requirements.
Not every borrower is required to provide personal tax returns.
Tax returns are more commonly requested when a borrower:
The specific requirements depend on your loan program and financial situation.
It is common for a mortgage underwriter to request additional information during the loan process.
This does not necessarily mean there is a problem with your loan.
An underwriter may simply need clarification or additional documentation to satisfy a particular mortgage guideline.
For example, the lender might ask for:
Mortgage guidelines are very specific, and sometimes one document creates the need for another.
Once you have started the mortgage process, it is generally a good idea to avoid unnecessarily moving large amounts of money between accounts without discussing it with your mortgage professional.
Moving funds between multiple accounts can sometimes create additional documentation requirements because the lender may need to establish a clear paper trail showing where the money originated.
Before making a significant transfer, deposit, withdrawal, or financial change, contact us if you are unsure how it could affect your mortgage application.
During the mortgage process, borrowers should also use caution before:
Changes to your income, assets, debts, or credit profile before closing could affect your mortgage approval.
If you are considering a significant financial change while your mortgage is being processed, speak with us first.
There is no single document checklist that applies perfectly to every borrower.
A salaried borrower making a 20% down payment may need a relatively simple set of documents, while a self-employed borrower with several businesses, investment properties, or multiple sources of income may require considerably more documentation.
Our job at Capital Funding Mortgage is to help determine what is actually needed for your particular loan, rather than unnecessarily asking you for documents that may not apply.
If you are thinking about purchasing a home or refinancing your current mortgage, you do not need to figure everything out on your own.
Capital Funding Mortgage can review your situation, explain which documents are likely to be required, and help you prepare for the mortgage process before your loan reaches underwriting.
The better prepared your mortgage file is from the beginning, the easier it is to address questions and keep the loan moving toward closing.
If you would like to discuss purchasing a home, refinancing an existing mortgage or simply comparing mortgage options, I invite you to contact me directly.
John Madden
Owner, Capital Funding Mortgage
Newtown, Pennsylvania
NMLS #960139
Cell 215 601 6724
Documentation requirements vary by borrower, lender, loan program, property type, and individual circumstances. Additional documentation may be required during underwriting.Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book.
