Items Needed When Applying For a Mortgage

February 16, 2024

Tim Clarke

Get expert advice from 17 + year veteran real estate agent Tim Clarke on navigating the mortgage process for a smooth home buying experience.

It used to be that lenders mailed out verifications to employers, banks, mortgage companies, and so on, in order to verify the data supplied by borrowers.

Nowadays, the interest is often in speed and getting answers quickly so alternate documentation has become more widely used.

Alternate documentation means that underwriting answers can be obtained with information supplied directly from the borrower instead of waiting around for verifications to come back in the mail.

The following is required for most standardized loans as part of alternate documentation processing.

Items may differ according to whether your loan is a conforming (Fannie Mae or Freddie Mac), non-conforming (jumbo) loan, government loan, or a portfolio loan.

Verifications are still mailed out, but usually as part of quality control procedures.

These are the things you need to supply to your lender to get a quick approval using alternate documentation

Income Items

  • W2 forms for the last two years
  • Pay stubs covering a 30 day period
  • Federal tax returns (1040s) for the last two years, if:
  • you are self-employed
  • earn more than 25% of your income from commissions or bonuses
  • own rental property
  • or are in a career where you are likely to take non-reimbursed business expenses
  • Year-to-Date Profit and Loss Statement (for self employed)
  • Corporate or partnership tax returns (if applicable)
  • Pension Award letter (for retired individuals)
  • Social Security Award letters (for those on Social Security)

Asset Items

  • Bank statements for previous two months (sometimes three) on all accounts. All pages.
  • Statements for two months on all stocks, mutual funds, bonds, etc.
  • Copy of most recent 401K statement (or other retirement assets)
  • Explanations for any large deposits and source of those funds
  • Copy of HUD1 Settlement Statement on recent sales of homes
  • Copy of Estimated HUD1 Settlement Statement if a previous home is for sale, but not yet closed
  • Gift letter (if some of the funds come as a gift from a family member)
  • Gifts can also require:
  • Verification of donor’s ability to make the gift (bank statement)
  • Copy of the check used to make the gift
  • Copy of the deposit receipt showing the funds deposited into bank account or escrow

Credit Items

  • Landlord’s name, address, and phone number (for verification of rental)
  • Explanations for any of the following items that may appear on your credit report:
  • Late payments
  • Credit inquiries in the last 90 days
  • Charge-offs
  • Collections
  • Judgments
  • Liens
  • Copy of bankruptcy papers if you have filed bankruptcy within the last seven years

Other

  • Copy of purchase agreement (if you have already made an offer)
  • To document receipt of child support (if you desire to show it as income)
  • Copy of Divorce Settlement (to show the amount)
  • Copies of twelve months canceled checks to document actual receipt of fund

FHA Loans

  • Copy of Social Security Card (or other documentation of social security number)
  • Copy of Driver’s license

VA Loans

  • Copy of DD214

Refinances

  • Copy of Note on existing loan
  • Copy of HUD1 Settlement Statement on existing loan
  • Name, address, phone number, loan number of existing loan/lender

Tim's Final Thoughts

After 17 years in the real estate business, I've learned that the mortgage process can be confusing and stressful for homebuyers.

My best advice is to be prepared and work with professionals you trust. Start by gathering all the required documentation early - pay stubs, tax returns, bank statements, etc.

Being organized will demonstrate to lenders that you're a qualified buyer. Next, find a reputable lender that understands your needs.

As your real estate agent, I can recommend lenders I've worked with successfully in the past.

Ask questions upfront to ensure you get the best rate and terms. Once you've selected a lender, maintain open communication throughout the underwriting process.

Immediately provide any additional documentation requested to avoid delays. Buying a home is an exciting milestone, but the mortgage process is key.

Having trusted advisors guide you through this complex journey is essential for a smooth transaction.

With the right preparation and team, I'm confident your home buying experience will be a positive one. My goal is to provide the expertise and service to make it stress-free and enjoyable.

Frequently Asked Questions About Items Needed For Applying For A Mortgage

What documents do I need to apply for a mortgage?

To apply for a mortgage, you typically need documents such as pay stubs, W-2s or other proof of income, tax returns for the past two years, bank statements, and identification documents.

How can I find a reputable lender for my mortgage?

You can find a reputable lender by asking for recommendations from someone with the Tim M. Clarke Team, researching online, and checking the lender's reputation in the market.

What can I do to get the best rate and terms on my mortgage?

To get the best rate and terms, you should have a good credit score, stable income, low debt-to-income ratio, and you should shop around with multiple lenders.

What is the underwriting process in a mortgage application?

The underwriting process involves verifying your financial information, assessing your creditworthiness, and evaluating the property you want to purchase.

How can I ensure a smooth transaction when buying a home?

To ensure a smooth transaction, you should work with experienced professionals, be proactive in providing required documents, and maintain open communication with all parties involved.

What are the common delays in the mortgage process and how can I avoid them?

Common delays include issues with property appraisal, title problems, and delays in document processing. You can avoid these by being proactive and responsive throughout the process.

How can a real estate agent assist me during the mortgage process?

A real estate agent can guide you through the process, recommend reputable lenders, and help negotiate terms on your behalf.

How can I demonstrate to lenders that I'm a qualified buyer?

You can demonstrate this by having a stable income, good credit score, and a low debt-to-income ratio. Also, being prepared with all required documents can show lenders you're serious about the process.

What is the role of a trusted advisor in the home buying process?

A trusted advisor, like a real estate agent or financial advisor, can guide you through the complex process, help you make informed decisions, and act as a liaison between you and other parties.

What steps can I take to make my home buying experience stress-free and enjoyable?

To make the process stress-free, stay organized, work with professionals you trust, be proactive in communication, and maintain a positive attitude throughout the process.

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Tim M. Clarke

About the author

17 years as a Realtor in the Research Triangle, Tim seeks to transform the Raleigh-Durham real estate scene through a progressive, people-centered approach prioritizing trust & transparency.

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