When applying for a mortgage, it is necessary to enclose certain documents that the lender will evaluate and make a decision on the loan. The required documents may vary depending on various individual factors. For example, if you are an entrepreneur, you will not need the same documents as the people who are employed in a company. That is why it is important to get informed in time about all the forms that you will need for this process. Among others, these are bank statements, your real pay stub, and others. All documents are intended to show your financial situation – your income and current debts. Here are some of the documents you will need to get a mortgage.
1. Photo ID
For starters, when applying for a mortgage it is necessary to attach your photo ID. For this purpose, you can use an ID card, passport, or driver’s license, whatever is at hand. This way you will verify your identity and assure lenders that you are the person you represent. While this may sound like an unnecessary part, the fact is that identity theft is not uncommon, especially when it comes to activities like this. So prepare an ID photo so that you can gain trust right at the beginning and continue with the conversation and the mortgage.
2. Bank statements
One of the first things a lender will consider is bank statements to get a better picture of your financial situation. For example, they will check if you pay for health insurance, how much property you have acquired by investing, and much more. Checking bank statements will allow lenders to conclude whether you are “covered” in case of any unforeseen circumstances. If they notice from your bank statement (or other documents, such as your real pay stub) that you are not able to repay the debt in the next few months, that is a bad sign, because this is one of the important requirements of the lender. Besides, bank statements allow them to get more information about the origin of your participation and whether you have collected it over a long period of time or whether that money has mysteriously all of a sudden appeared in your account.
3. Income tax returns
Another important document when applying for a mortgage is income tax returns. With the help of these documents, lenders gain insight into the income you have reported to the tax administration, as well as deductions. Usually, lenders require tax returns for the previous 2 or 3 years, because that is enough for them to understand your tax situation a little bit better. Another option is to copy all income tax returns, fill out the necessary form and forward these papers to the lender so that he or she can get in touch with the tax administration and check the validity of the information.
We do not even have to emphasize that it is necessary for all documents to be valid. If you do not submit your exact income taxes or your real pay stub and the other party finds out you will be in big trouble. And then you can forget about the mortgage.
4. Your real pay stub
Your real paystub is another document that gives lenders an insight into your income and its stability. Providing information about your paystub in the previous two or three months will allow the other party to make a decision on your income stability and therefore, whether to grant you a home loan or not. While this may sound risky, it is far from it, because if you submit your real stubs and show that the income and their continuity are satisfactory, you have no reason to worry.
How can you deliver your real pay stub? If you are a small business owner it will be necessary to create your real pay stub for the past few months. This is very simple because you can get a free pay stub template using free pay stub generators. If this is your case we suggest you learn more about how to make check stubs online. It will come in handy for your business in general, but you will also save some money when applying for a mortgage.
In case you receive alimony, it will be necessary to submit these documents as well. If you are wondering why this is necessary, we will remind you that the lender must collect all the information about your income, regardless of its origin. The more income you have, the greater the chances that you will be granted a mortgage and that you will achieve the desired results. Bank statements will be enough to show the other party that you regularly receive alimony and that it is a transaction that happens every month, without exception.
6. Rent payment information
Although your real pay stubs and bank statement can provide evidence of financial stability, a few more documents confirming that you are paying your obligations on time are not out of the question. For example, if you are renting an apartment, you will need to provide the lender with proof of your regular rent payments. Rent paid on time in the previous year is an important document that can be of great help when applying for a mortgage.
7. Divorce decree
If you are divorced, the divorce decree is another document that you will have to provide to the lenders. Why? Because this document provides more information on whether you receive or pay alimony or child support. In case you pay it, it will be another expense for them to consider, and if you’re receiving it monthly it can be another guarantee that you have a regular additional monthly income. And this will increase your lucky odds during this process.
When applying for a mortgage, it is necessary to provide several different documents to the lenders. This information helps them gain a better insight into your income and eventual debts. Besides bank statements, real pay stubs, and income tax returns, it will be necessary to submit documents about your divorce, alimony payments, and others. Gathering information about the necessary documents for this process will save you time and ensure that everything goes as smoothly as possible.