- Live Rates
- Contact Us
If not done properly, applying for a mortgage can be stressful and time consuming, but with the right preparation the entire process can be seamless. Here are some crucial pieces of information that almost any lender will require before approving a mortgage.
One of the most important documents a borrower will be asked for is their federal tax return along with a signed Form 4506-T, which will allow the lender to contact the IRS directly for their version of the federal tax return to compare to the ones provided. This allows them to examine the documents for any sign of fraud.
The mortgage lender will require proof of every current asset owned by the borrower. This will include any current real estate titles along with bank and mutual fund statements and documentation on current investments. Don’t be shy, every asset owned is a better sign to the lender.
On the opposite side of the coin, the mortgage lender will also want to be made aware of any current debt. All debts, from major student loans to miniscule credit card debts, will need to be documented and given to the lender. It’s important to provide information on monthly payments that need to be made, even if it appears insignificant.
Almost every lender will require a Form W-2 for the previous business year to see how much income was earned by the borrower. Many will require at least two years’ worth of W-2s to see if the income has been consistent.
Alternatively, any self-employed borrowers will be required to provide profit and loss statements to show the current status of their business. Like W-2s, the lender may require documents showing profit and losses for at least two years if the business has been in existence that long.
Having all your documents ready in advance to applying for a mortgage can go a long way to helping the process go smoothly. The documents needed for a mortgage change from person to person depending on their situation, so make sure you speak with a qualified mortgage professional in advance to get a better idea of which documents you will need to supply.
Recasting or making a lump sum payment on your mortgage loan has its advantages and disadvantages. But there are certain instances where making a lump sum payment on your mortgage just makes sense.
Summary: The mortgage application requirements for a salaried individual may differ from that of a self-employed person. If you run your own business, you may have to come up with additional documents to help prove you are capable of making…