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What You Need When Applying For A Mortgage

Larry Mastropieri

Larry Mastropieri is co-founder of Real Estate Group in Boca Raton, Florida...

Larry Mastropieri is co-founder of Real Estate Group in Boca Raton, Florida...

Jul 22 4 minutes read

So you’re ready to apply for a Home Loan. Our Mortgage Document Checklist will help you find what you need and apply with confidence.

When you are buying a home, gathering the paperwork to apply for a mortgage can seem overwhelming. However, it is a good idea to have your documents organized before you apply. While tracking down the documents can take time, doing so before you need to can help you get to closing faster. 

You will owe your mortgage lender a stack of documents once you apply that show you can repay your loan. A mortgage application typically require documentation to verify 

  • Income and Employment

  • Assets and Debts

  • Credit History 

  • Identity 

  • Rental History 

Mortgage Application Information
The first step in applying for a mortgage is completing the Universal Residential Loan Application. This form, which asks for personal information and financial details, is required of each applicant. Lenders then use this form to determine if you qualify for a loan. 

Income Verification
Income verification is required to ensure the lender can pay back the money borrowed. When lenders check a borrower’s income they are looking for stability and consistency to make sure the borrower can afford mortgage payments. For proof of income, lenders are looking for W-2 forms, pay stubs, income tax returns, and any alimony or child support documents when applicable. 

Assets and Debts
Lenders want to know your debt to income ratio. They will want to make sure you have the assets to be financially stable after paying a down payment and closing costs on a home. On your mortgage application, you will list all monthly debt obligations, including student loans, car payments, credit cards and any existing mortgages. Your lender will ask for documents such as bank statements, and retirement and investment account. 

Credit Verification 
Arguably the biggest part of getting a mortgage is having your credit checked. Your lender will ask permission to check your credit history. While a low credit score or a bad history won’t necessarily prohibit buyers from obtaining a loan, your lender will ask for a letter explaining any late payments, collections or derogatory marks. Your lender will also check your credit score. Since interest rates are on a scale corresponding to your credit score, the better your credit score, the lower your interest rate. Finally, your lender will ask for other documentation as applicable to your unique situation. For example, a lender will ask to see rental payments and rental history, a divorce decree, and bankruptcy or foreclosure records. 

Passive Income
Passive income, specifically rental income or rental property income is another important piece of information your lender will want to know. Your lender will look at when you bought your rental properties, rental income history, and how you reported this income on your tax returns. 

The actual list of documents your lender requests may vary, depending on the lender, the type of mortgage you want and your financial situation. Ask the lender for a list of paperwork you might need to provide, and start collecting it before you begin the application process.

Having everything ready from the beginning will help you close on your home with less stress. 

It's no secret that applying for a Home Loan can be stressful. Let us make the process easy for you. Watch our Lender Series on Youtube to learn all of the latest information about applying for a home loan.

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