Here are some key points and the documentation typically required:
- Loan Application: This is the initial step where you’ll provide personal information including employment history, income, debts, and assets.
- Credit Report: Lenders use your credit report to assess your creditworthiness. They look at your credit score, payment history, and overall credit management.
- Proof of Income: Documentation such as pay stubs, tax returns, and W-2 forms (or 1099s for self-employed individuals) are required to verify your income.
- Employment Verification: Lenders may contact your employer to confirm your employment status and income details.
- Debt Information: Details on current debts and liabilities, including credit card statements, car loans, and student loans, are needed to evaluate your debt-to-income ratio.
- Property Information: If you’re purchasing a property, you’ll need the purchase agreement, property listing, and sometimes a property appraisal.
- Identification: A government-issued ID (like a driver’s license or passport) is needed for identity verification.
- Down Payment: Documentation proving the source of your down payment (e.g., bank statements or gift letters) is necessary to ensure the funds are legitimate.
- Legal Documents: Depending on your situation, you may need additional legal documents such as divorce decrees, bankruptcy discharge papers, or rental history.
NOTE: These documents help lenders assess your ability to repay the loan and determine the terms of your mortgage