Documents Needed For A Home Loan

When getting a home loan or refinancing your current mortgage, there are several documents you have to provide to prove that you qualify. Knowing what these documents are ahead of time can help you best prepare for the loan process.  

Common Documents For Home Loans

Below you will find a list of documents that may be required to secure a home loan or refinance your mortgage. 

Keep in mind that while this list includes many of the commonly required documents, along with some that depend solely on your background, each mortgage application process is different. Some lenders may require more or less to qualify. 

Current Residence

If you're renting

Canceled Checks or Bank Statements: If you're currently renting a home or apartment, you will need to provide 12 months of canceled rent checks. You could be required to provide 12 months of bank statements showing when rent checks cleared. This is to prove that you have a history of making on-time payments.

On-Time Payment Confirmation: Alternatively, mortgage lenders might ask your landlord to complete a form confirming on-time payments for at least 12 months. 

If you own a home

Lease Agreement: If you choose to keep your current home and rent it out, you'll need to provide a lease agreement. Also, your lender will want proof that the first month's rent has been paid before you close on your new home. 

Listing Agreement: If you choose to sell your home before closing, you'll need to provide a listing agreement for that property. The closing on your new property will likely be dependent on the sale of your old property. 

Income Documentation

In almost every instance you will be required to provide: 

Personal Federal Tax Returns: You will need to provide all pages of federal tax returns for the past two years. 

Rental Income:  If you want to include income from rental property as a form of income, it will usually only count if it's included on your tax return. 

Other documentation depends on...

If you're an employee

Pay Stubs: Be prepared to show pay stubs from all your jobs (including part time positions) for the last 30 days

W2 Forms: W2 forms for all jobs from the past two years are required. 

If you're self-employed

Profit and Loss Statement: If you're self-employed, there are different requirements. Typically, a year-to-date profit and loss statement for your business is necessary.

Business Federal Tax Returns:  Additionally, all pages of business federal tax returns for the past two years are required. 

Banking Documentation

Bank Statements: Your lender may ask for banking statements for the last two months for all checking, savings, investment, and retirement accounts. It's essential that you include all pages of each statement, even if they're blank or provide information that you deem to be unimportant or irrelevant. 

Transferred Bank Statements: If your banking statements show money transfers between other accounts, you will need to provide information for each account as well. Your lender will review all of this information, and follow the paper trail for each transfer.

Credit Information

Credit Authorization: Your lender will need to run your credit, so you will need to provide verbal or written authorization for this to happen.  

Letters of Explanation:Based on your credit history, you may be required to provide letters of explanation for all credit inquiries, past addresses, tax liens, and derogatory remarks on your credit report. 

Other Home Loan Documentation

Bankruptcy Discharge Papers: If you filed bankruptcy in the past seven years, you will need to supply bankruptcy discharge papers. 

Divorce Decree: If you're divorced and have a child support or alimony order, you may need to provide a divorce decree. Your child support or alimony order will also be necessary if you would like the lender to consider this  as income. Gift Letters: In cases where gift funds have been received to purchase a home, you will be asked to present a gift letter from the person who gave you the money. Gift letters serve to verify that the money is a gift, not a loan. Home lenders may ask for the bank statement of the “giver” for the account the money was transferred from. Other lenders will only want to see the money deposited in your account.&nbsp

Essential Home Loan Documents

When securing a home loan, the documents you have to produce will depend significantly on your financial circumstances. These documents can vary based on your lender, but overall, expect to provide similar documentation wherever you go. 

Whether you're purchasing your first home, refinancing a property or investing in a second home, you will find that having your documentation ready is one of the best ways to make the home loan process as stress-free as possible.

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