You’re getting a mortgage … what kind of paperwork do you need?
The answer? A lot. But not as much as you might think, and it’s somewhat dependent upon (1) the lender you’re using, (2) the type of loan you’re getting, and (3) some unknown force of the universe.
Getting a mortgage isn’t terribly hard, it’s just tedious. So when you’re preparing to make a loan application with a lender, it’d be a good idea to have all documentation related to your income, your expenses, and your assets, at hand – ’cause they’ll want to see everything. Have:
- at least two years of your tax returns (three or more if you’re self-employed), including all W-2s and 1099s. Two month’s worth of pay stubs, as well.
- bank statements. The rule of thumb used to be three months worth of bank statements, but I like being prepared – have six months.
That’s it. But be prepared to explain everything – if you have lots of overtime pay, be prepared to explain why, and how much. If you’re getting large deposits (from the sale of items, like cars, etc.), be prepared to explain where those came from. And if you’re getting money for a down payment, be sure to talk with your lender before receiving the gift, so that you know you’re receiving and handling the gift appropriately.
There are plenty of hoops to jump through when getting a mortgage, but being prepared will go a long way. Talk to your lender about what’s going to be needed, as well as what needs to be done before getting the loan so that you’re in the best position possible for the type of loan you want. Loan contingencies are one of the most common areas we see a deal fall apart … the buyers who take the time to get prepared up front typically have no issues at all.