Documents Needed for a Home Loan

mortgage documents

If you decide to refinance or purchase a home with a mortgage, you will be required to fill out a loan application form and sign a set of disclosures in order to initiate the mortgage process.

This bundle of documents includes things like the Truth in Lending disclosure, the Good Faith Estimate, the HUD-1, Credit Report disclosure, a Social Security release form, and many more.

The GFE and TIL and HUD-1 have since been replaced by the “Loan Estimate” and the “Closing Disclosure.”

These disclosures provide important details about your loan and allow the bank or mortgage broker to gather sensitive information about you such as employment and credit history, bank statements, income documents, and so forth.

When all the disclosures are signed, the loan process can begin.  At that time, the loan officer or mortgage broker will collect important documents from you and submit your loan application to the underwriter.

[Do I even qualify for a mortgage?]

If your mortgage application is approved, you will receive a conditional approval from the mortgage underwriter with a set of conditions that need to be met in order to receive loan documents. These are called “prior to document” conditions, or PTDs, because they must be satisfied before loan documents can be drafted and sent out.

Once loan documents are signed, “prior to funding” conditions will need to be met to ensure the loan actually funds and records. These are usually sent back along with the loan documents from title/escrow.

Below are some of the basic documents you’ll need to provide to effectively get your loan funded based upon documentation type:

Full Doc:

Signed loan application
Latest 2 years tax returns and/or pay stubs
Latest 2 months bank statements, Verification of Deposit (VOD), or other acceptable asset reserves
*CPA letter and/or business license if self-employed stating 2+ years employment in same job or field.
The bank or lender will call your employer if you are W-2 and do a verification of employment.
Gift letter for down payment (if applicable)
Rental history (typically 12 months of cancelled rent checks) if currently renting or VOR
Home Appraisal
Preliminary Title Report
Proof of insurance (Hazard, Flood, etc.)
Signed Disclosures
Letter of Explanation(s) (for any issues that need clarification)

Stated Income Verified Assets:

Signed loan application
Income is simply stated (written) on the 1008/1003 (loan application)
Latest 2 months bank statements, VOD, or other acceptable asset reserves
*CPA letter and/or business license if self-employed stating 2+ years employment in same job or field.
The bank or lender will call your employer if you are W-2 and do a verification of employment.
Gift letter for down payment (if applicable)
Rental history (typically 12 months of cancelled rent checks) if currently renting or VOR
Home Appraisal
Preliminary Title Report
Insurance (Hazard, Flood, etc.)
Signed Disclosures
Letter of Explanation(s) (for any issues that need clarification)

No Ratio:

Signed loan application
No income information is provided whatsoever
Latest 2 months bank statements, VOD, or other acceptable asset reserves
*CPA letter and/or business license if self-employed stating 2+ years employment in same job or field.
The bank or lender will call your employer if you are W-2 and do a verification of employment.
Gift letter for down payment (if applicable)
Rental history (typically 12 months of cancelled rent checks) if currently renting or VOR
Home Appraisal
Preliminary Title Report
Insurance (Hazard, Flood, etc.)
Signed Disclosures
Letter of Explanation(s) (for any issues that need clarification)

Stated Income Stated Assets:

Signed loan application
Income and assets are simply stated on 1008/1003 (loan application)
*CPA letter and/or business license if self-employed stating 2+ years employment in same job or field.
The bank or lender will call your employer if you are W-2 and do a verification of employment.
Gift letter for down payment (if applicable)
Rental history (typically 12 months of cancelled rent checks) if currently renting or VOR
Home Appraisal
Preliminary Title Report
Insurance (Hazard, Flood, etc.)
Signed Disclosures
Letter of Explanation(s) (for any issues that need clarification)

No Income No Assets:

Signed loan application
*CPA letter and/or business license if self-employed stating 2+ years employment in same job or field,
The bank or lender will call your employer if you are W-2 and do a verification of employment.
Gift letter for down payment (if applicable)
Rental history (typically 12 months of cancelled rent checks) if currently renting or VOR
Home Appraisal
Preliminary Title Report
Insurance (Hazard, Flood, etc.)
Signed Disclosures
Letter of Explanation(s) (for any issues that need clarification)

No Documentation:

Signed loan application
Income, assets, and employment are not revealed to the bank or lender.
A CPA or business license is not necessary.
Gift letter for down payment (if applicable)
Rental history (typically 12 months of cancelled rent checks) if currently renting or VOR
Home Appraisal
Preliminary Title Report
Insurance (Hazard, Flood, etc.)
Signed Disclosures
Letter of Explanation(s) (for any issues that need clarification)



50 Comments

  1. Colin Robertson November 22, 2017 at 2:10 pm -

    Misty,

    Lenders will order VOEs to ensure borrowers still work where they say they work and are in good standing. It’s not out of the realm of possibilities for someone to be laid off or fired right before applying for a mortgage. And just to verify everything from the loan application matches up.

  2. misty Collins November 21, 2017 at 2:01 pm -

    Why would a voe be needed if you have 2 years of w2s with the same employer especially if the income matches.

  3. Ruth Anne August 2, 2017 at 9:17 am -

    In VA, what is the law regarding electronic signatures/documents when you are married? Does the lender need my husbands SS# even though his name is not going on the refi for my house I bought before I met him?
    Thanks

  4. Colin Robertson July 7, 2017 at 12:35 pm -

    Robert,

    That’s not something I do, but I faintly remember a company that specialized in the exact thing you’re talking about. I tried to look them up, but couldn’t find anything unfortunately. Technically, loan officers and/or brokers are supposed to help with these types of things too before submitting the file to underwriting.

  5. Robert Rodriguez July 7, 2017 at 9:54 am -

    Hello Colin,

    My fiancee’ of 21 years and I co-own a home in Redondo Beach outright. The home is currently valued at $720,000. We are looking to take out a $100,000 loan on the property. We are 99% finished with the loan paperwork, and we are looking for someone to assist with finishing it up, making sure nothing is omitted, and basically dotting all the “I’s” and crossing all the “T’s” before we start submitting our paperwork to various lenders.

    Please email me to let me know if you available for this kind of service and an estimate of your fee; or, in the alternative, if you know of any services in the Greater Los Angeles area who might be able to help, especially any in the South Bay/Beach Cities area. Please include your business telephone number in your reply.

    Most appreciatively,

    Robert

  6. Christina April 13, 2017 at 8:21 pm -

    We are about to go through the process of applying for a VA loan. We have talked to a couple of loan officers that do not seem very informed about the process of applying for a VA loan. Which would be better, a bank or lender? We are also in the process of getting married. Is it possible to start the application before marriage as long as we are married before we get final approval?

  7. Colin Robertson February 17, 2017 at 6:18 pm -

    Maribel,

    It’s possible because documents are gathered and submitted for the purpose of loan approval, and until all documents are in, reviewed, and all conditions are signed off, that approval is conditional. Meaning if things come to light it could affect that approval.

  8. Maribel Mora February 17, 2017 at 5:01 pm -

    After giving all DOCS for the home loan…can I be denied for the loan after coming this far?

  9. Colin Robertson October 25, 2016 at 7:48 pm -

    Ginny,

    AccountChek is a product from a reputable company called FormFree. I believe the loan officer creates a secure link (they send you an e-mail) for you to verify the bank account(s) using your credentials. Once you receive the e-mail and verify the details it allows the loan officer to generate VOAs. So you shouldn’t have to share your login info with anyone, but rather verify it remotely on your own.

  10. Ginny October 25, 2016 at 5:33 am -

    I am in the process of a refinance. We are into to 4th month of the process and it is getting really frustrating. I am having to give my pay stubs again because it has been so long. This is the 3rd time doing a refinance, but I have never been asked to give my ID’s and passwords to all my bank accounts. This just seems wrong. I don’t mind giving bank statements, but this seems more like a scam. They are using a company called Accountchek which is has no ratings, no reviews, and is not a part of the BBB. What do you suggest if they won’t accept current bank statements. I would really appreciate your advice. Thanks

  11. Colin Robertson September 19, 2016 at 8:37 am -

    Nicole,

    Not sure to be honest…might depend on how close you are DTI-wise to getting approved and if the different is material to the situation.

  12. Nicole September 15, 2016 at 8:55 am -

    Colin I am in underwriting right now…waiting to hear back…but my loan processor has asked me for additional documents that she thinks are missing from my 2014 tax returns. I received copy of my 2014 tax returns from the preparer and the specific form that is in question is the schedule A reimbursement section. The amount there does not equal the amount from my 2106 form. I called my tax preparer and she stated that she used an electronic system and the system made the calculations and that is what was reported to the IRS….is this really a big deal or will underwriting give me issues with this. the amount of unreimbursed expenses was 30,000.00 the amount the 2106 form has is 25,000.00…im not sure where the other 5,000.00 went. These calculations are from my husbands expenses and he is no longer employed with the company he left back in 2014 and has been a teacher since then.

  13. Colin Robertson August 22, 2016 at 7:49 pm -

    Diane,

    It might make sense to get a bank account so you can show verified assets. And see if you can raise your credit scores while you’re at it. There might be some options if the property cash flows but you’ll have to do some digging around. Maybe look into non-qm loan options or a pure rental income loan program.

  14. diane williams August 16, 2016 at 12:45 pm -

    hi there i was wondering how can i go about refinancing my home with the least documentation, since i dont have a bank acct.i live on the rental income i recieve from the property. aprox $1400 a month. right now im in an interest only loan an after 7 years have paid 10 dollars on the principle. my credit scores around 672. any information u can give me would be very much appreciated

  15. Colin Robertson August 4, 2016 at 11:23 am -

    Sonja,

    Non-arms length transactions tend to be heavily scrutinized…probably even more so if you received a payoff less than mortgage amount.

  16. Sonja Alderson August 2, 2016 at 4:21 pm -

    Kind of complicated loan, I own the house my partner & I have lived in for 28 years. I went bankrupt 3 years ago & kept my home under the HOMESTEAD EX; law, for some reason it went into a recovery account & they have agreed to take $20k on a $70K balance. My s/o is a Vet & is pre-approved for $125K to buy my house, we have jumped thru all the hoops & are waiting for the CTC. They say it seems like a “bailout” &it is back in Underwriting for final approval. I don’t understand why it might me declined just because of that word, house appraised at $270K.

  17. Colin Robertson March 22, 2016 at 11:39 am -

    Kay,

    Sadly, yes, it can be very normal. Getting a mortgage can be a very frustrating and lengthy process. If you’re truly worried you can reach out to other lenders for quotes so you have at least have potential backup options.

  18. Kay March 21, 2016 at 2:23 pm -

    Is it normal for a loan company to ask again and again for bank statements? And for them to take weeks before asking for more paperwork (i.e., documents needed for final approval and contract obligations)? We’re going through a company that is not well known (at least according to Google) and I don’t want to fall into a trap. Our loan is for 50,000, so it’s not an expensive home.

  19. Colin Robertson March 6, 2016 at 11:21 am -

    Mary,

    Ask why updated disclosures are needed. What changed on the forms? Loan terms? Rate? Costs?

  20. Mary March 6, 2016 at 10:15 am -

    I was just informed by bank that they need to do a update disclosures for my first time mortgage loan what does this actually mean my app already has went through the underwriter so I’m not really understanding the process.

  21. Colin Robertson February 7, 2016 at 11:21 am -

    Shaay,

    Generally yes unless it’s a stated income loan or asset depletion loan.

  22. Shaay February 5, 2016 at 11:23 am -

    Are W2s always needed for the lender???

  23. Colin Robertson October 26, 2015 at 4:57 pm -

    Jennifer,

    You could ask how they came up with that determination if you disagree. Many people assume they don’t live in a flood zone when in fact they do, even if the chance of a flood is very, very low. Or sometimes the flood zones may change over time. Maybe this link will provide some insight: http://www.fema.gov/homeowners-frequently-asked-questions#hm3

  24. Jennifer October 22, 2015 at 6:06 pm -

    We are in the process of a refinancing our primary residence. The lender has sent me the form “Notice of Special Flood Hazards and Availability of Federal Disaster Relief Assistance” which they insist must be signed. I assume you know what the document states. The way it is worded indicates we will be part of a flood zone. Where we live that is impossible. Is it a required document for a refi? I am afraid that it will be used to force us to pay flood insurance if we sign it. I don’t remember ever signing that form in the past.

  25. Colin Robertson October 15, 2015 at 8:45 am -

    Kumar,

    Lenders generally look at the past two years tax returns and latest pay stubs so they’ll probably notice gaps in employment. But if you can explain the gap and show steady income/employment you may be able to get around it.

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