While the exact forms may vary, Todd Huettner, owner of Huettner Capital, a residential and commercial real estate lender, says that a lender can get a clear picture of their chances of getting approved by looking at their recent pay slips, bank statements, W-2 forms and tax returns. Mortgage lenders want to know the full story of your financial situation. You'll probably need to sign a Form 4506-T, which allows the lender to request a copy of your tax returns from the IRS. Lenders usually want to see tax returns for one or two years.
This is to ensure that your annual income matches the income reported on your pay stubs and that there are no large fluctuations from year to year. Lenders may ask you to see your pay stubs for the last month or something like that. Their tax returns help them get a clear picture of their overall financial status, while pay stubs help them calculate their current income. If you're self-employed or have other sources of income (such as child support), you may need to credit your lender through 1099 forms, direct deposits, or other means.
You and your co-borrower (if applicable) must complete your personal information, including your name, current address (and whether you rent or own), previous address, if you are less than two years old (and if you rented or owned), Social Security number, phone number, marital status, date of birth, number of years of study, and number of dependents. The lender will use this information to prepare your credit report. Learn how mortgage payments work, how to pay them back, and the pros and cons of monthly mortgage payments instead of biweekly mortgage payments. Before filling out the mortgage application, it's a good idea to gather the necessary documents and information in advance, especially if a mortgage lender is helping you in person or over the phone.
Lenders will ask you for documentation for your mortgage application that shows things like how much money you make and what your debts are. These expenses include the current rent or mortgage payment, mortgage insurance, taxes and homeowner association dues, basically any expense related to housing. The first section of the mortgage application asks you to indicate the type of mortgage you are looking for, either conventional or FHA.