Dear What Documents Do I Need:
This is another good question. The lending portion of the home buying process can sometimes be the most stressful if you don't know what to expect. And although all loan situations are unique, here is a list of the documents you will most likely need to supply to your lender for both your pre-approval and your actual loan, along with a list of potential documents you might need.
Basic Commonly Needed Documentation
- W-2: two years worth of W-2's (if you have a conventional W-2 job)
- Pay Stubs: at least one month worth of pay stubs
- Bank and Asset Statements: last two months of bank and asset statements (make sure to provide ALL pages, even if some are blank)
- Tax Returns: the last 2 years tax returns and all schedules (but might need to provide more in certain circumstances like being self-employed, having a rental property, etc.)
- Identification: your driver's license, passport or state ID card
- Business Tax Returns: if you own a business or are self-employed you have to document all income you claim on your loan application and the docs you need to provide vary based on the business structure but might include profit and loss statements, business tax returns, etc.
- Source of Funds: if your submitted bank statements include any large or unusual deposits you will have to verify where you received the money from
- Proof of Reserves: most lenders want to see proof that you have enough reserves to cover at least 3 months of your mortgage payments
- Cancelled Rent Checks: if you don't own you will need to prove you pay your rent on time with a landlord verification form or 12 months of cancelled rent checks (giving your lender your landlord's contact information up front is super helpful too!)
Other Documentation You Might Need
- Gift Letter: if someone is gifting you money to help with the purchase a gift letter from that person will be needed along with proof of funds for the gift
- Alimony or Child Support Documentation: if you want to use the income from alimony or child support to qualify for your loan you will provide the lender with proof of payments, etc.
- Proof of Military Service: if you are getting a VA loan you will provide the required document proving your past or present military service
- Proof of Legal US Residency: if you're not a US Citizen you will need to give your lender proof of your legal residency
Also, it is important to remember that the lender may need updated copies of these documents as the loan process progresses. They may ask for the most recent pay stubs or bank statements if it has been a month or so since you gave them your last copies. This is normal! Anticipating that they will need these makes the process a lot smoother for you. Many clients say, "I already gave them those, why do they just keep asking me for documents I already provided!" and the answer is, because they need them to verify things haven't changed.
Just remember to gather all of the documents listed above that fit your situation, keep them in one folder until the loan closes and put all updated or new copies of these documents straight into the folder when they come to you. Then you will always be ready and the process will seem less cumbersome. And, with loans, time is of the essence. If the lender requests a document, get it to them as fast as you can in order to give you and your lender the best chance of closing your loan on time on the agreed upon closing date in your purchase contract.
By Marco Kronen with Seattle Condo Review: A guide to Seattle downtown condos.
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