How Do I Prepare Information for a Mortgage Application?
The mortgage process is a daunting exercise in paperwork. Until the day you close, you'll be chasing data and trying to digest dozens of details that will seem pretty foreign. But at the outset, it's you who will be giving the answers that lenders need to make their decisions.
It's good to be ready with all the personal paperwork you'll need to prove income for the first mortgage or refinancing loan process, so start making a file. Plan on making copies, front and back. Here are some of the items you'll need:
W2s, pay stubs, bank and brokerage statements
An explanation of how you plan to use the property
An updated list of everything you owe: When you do apply, you'll create a liabilities list that will conform to your credit report.
Invoices or IRS Form 1099s from any self-employment income
Commission income: Lenders will want to know your base salary, which in sales can be low. If you want to supply proof of actual earnings, be precise about extra income like this.
Proof of unemployment or disability income: Lenders will accept disability payments as income if you can prove you'll be collecting it for at least three years.
Proof of child support and alimony income: Make sure you make photocopies of each check before depositing and keep all corresponding bank statements to prove those checks were deposited.
Documentation of all other income: Pension income, survivor's benefits, an annuity, allowance, annual bonuses, Social Security income, stock options, even royalties from software, books, or music — you can count it if you can document it.
Valuable collections: Make sure you have insurance or appraisal statements to prove that value.
Proof of down-payment assistance from family, a community group, or government program: Any family contribution must be a gift, not a loan. All lenders will want proof of this.
Proof of homeowner's insurance: This is necessary if you are refinancing a property you already own.
Current street address, e-mail address, phone, and Social Security number: If you've lived at your current address for less than three years, the lender will want to know where you lived before that. If you are buying the home with another person or persons, they'll probably want to know your relationship to the coborrowers.
At many lenders today, you won't be filling out forms in pencil. Instead, lenders will be asking you questions and typing your answers into a form on their computers. (In the future, you might be doing this at home in your PJs and shipping your application online.) The important thing is to be organized and give every aspect of your finances — particularly your credit obligations — a thorough review. You want your information to be accurate so you won't be tripped up in the review of your obligations your lender will do.
