In the past applying for a mortgage was easy: You’d complete an application and the lender would pull your credit score. More often, you would be approved. However nowadays lenders are much more strict. In order to be considered for a loan lenders require taxable income, assets, rent payments and more.
Tip: bring in documents early. Doing this can speed up the process. Also do not cross out or white-out any information on the document. If you make these changes, it’s not a valid documentation. Some of the things loan originators will require would be:
· Paystubs, W-2’s
o Loan guidelines typically specify a month of verified income. This is provable with the borrower’s paycheck stubs. If employees pay electronically the paystubs can be accessible through the corporate website and will be available for printing.
o A mortgage lender typically require your most recent W-2 form, some lenders will ask the borrower for two years of W-2’s.
· Investments, bank, and tax documents
o Borrowers typically must show proof of investment. This is done by presenting an investment account statement within the last 30 days. If applying for a jumbo loans, lenders could ask to provide up to 3 months of statements.
o Income tax returns
o Lenders will also need to sign an IRS Form 4506-T, which grants the lender to get a hold of a transcript of tax return. This practice is in effect to prevent fraud.
· Profit-loss statement
o This is usually for self-employed borrowers, who are required to have a current-year profit-and-loss statement.
· Rental property income
o Borrowers who include rents from investment properties in their income need to be able to show the income on their tax return. Cancelled rent checks and bank statements might be alright if the property was purchased in the current calendar year.