What documents will your mortgage broker (lender) require to complete your loan application and begin processing your loan?
Checklist for a mortgage loan
Complete loan application
Here is our secure online loan application link if you would like to apply with us. Or you can use this marketplace link to find loan programs and check your interest rate.
Below is a downloadable PFD form. Fannie Mae New 1003 Uniform Residential Loan Application. This is a blank application you may use with any lender in the United States.
Income
Lenders will require proof of your income.
This one is a little more complicated for some borrowers that are self-employed, for example.
Most applicants with steady employment income will only need to provide 30 days worth of pay stubs and the last two years’ IRS W-2 forms.
If your self employed you will need to provide the most recent two years of tax returns, all pages, and schedules.
You are considered self-employed if you own a business, (25% or more) receive commission income or your income is reported to the IRS on any tax form other than a W-2 form.
Business owners may also need a signed and dated Profit and Loss Statement and Balance Sheet.
Other income
Some or all of your income may come from sources other than employment.
SSI – Social security retirement or disability income.
Rent or Royalties
Annuities or Lawsuit Settlements
Child support or Alimony
Mortgage Interest or Loan payments someone owes and pays to you
These are just a few examples. Generally, you’ll need to provide statements or contracts showing the amounts you receive.
You’ll also need to prove receipt of the money such as bank statements showing the incoming deposits.
The rules for other income typically require you to prove the income will continue for the next two or three years.
Exceptions apply with other forms of income so discuss this with your lender before you apply or very early in the process.
Assets
For home purchases
Most of you will only need to provide your last two bank statements showing at least enough money to bring to your closing.
For the smoothest loan processing and closing, your funds to close should be in the bank for at least two months prior to application.
If that’s not the case you’ll just have to provide printouts showing the money in the bank about a week prior to closing. You’ll also have to explain where it came from with a signed and dated letter of explanation (LOE).
It’s a big plus if you have some leftover funds, called reserves. This may be required for shaky credit or on full doc investment property loans.
Most loan programs allow gift funds from family members for some or all of the down payment and closing costs.
Contrary to popular belief you can borrow money from an online installment lender or your local bank.
Secured and unsecured loans are allowed. You must disclose this on your loan application in the liabilities section.
You must also qualify for the mortgage with the newly created debt. Your loan originator will ask for a letter (LOE) explaining this along with a copy of the loan agreement.
There are so many different situations when it comes to proving your assets. It’s best you talk your loan officer if your funds have not been in the bank for two full months prior to application.
For Refinance loans
You’ll need to provide two months of bank statements.
If you’re not bringing any funds to closing you don’t need to have any liquid assets unless reserves are required for the loan program you are applying for.
Retirement and investment accounts can be used to meet any reserve requirements as well.
Two forms of Identification
At least one form of ID must have a photo
Here is a shortlist of acceptable photo ID’s
- State issued drivers licenses front and back
- Military ID
- Valid Passport
Secondary ID’s
- Social security card
- Birth certificate
- Or any of the photo ID listed above.
Items specific to Purchase or Refinance mortgages
Purchase and sale agreement/sales contract
Mortgage statement for refinancing. Also, gather statements for any debt to be paid off with the refinance.
These are the basics or at least what you’ll need to submit to your loan officer after you complete form 1003 or an online mortgage application.
You will have to update and provide other documents (conditions) along the way your loan representative or loan processor will ask you for these as needed.