Documents Needed for a Home Loan

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 Credit Report disclosure, a Social Security release form, and many more.

These disclosures 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 this time, the bank or mortgage broker will collect important documents from you and submit your loan application to the mortgage lender.

[Do I even qualify for a mortgage?]

If your 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
Electronic Appraisal
Preliminary Title Report
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
Electronic 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
Electronic 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
Electronic 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
Electronic 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
Electronic Appraisal
Preliminary Title Report
Insurance (Hazard, Flood, etc.)
Signed Disclosures
Letter of Explanation(s) (for any issues that need clarification)


22 Comments

  1. F YOUNG March 25, 2015 at 9:15 pm -

    Are there mortgage lenders that use your bank statements for income verification instead of tax returns?

  2. Colin Robertson March 26, 2015 at 7:56 am -

    Yes, it’s called asset depletion.

  3. cavell April 2, 2015 at 8:40 am -

    Hi, I need some understanding in getting a mortgage, my wife and I,both have FICO score in the 800+ range, we have land that we bought, the price of the land went way down, The Deltona corporation where we bought the land, told us we can use the equity from the land to purchase one of there new home. What is best way to approach shopping around for a mortgage, and how much it will affect our FICO score.Thanks.

  4. Colin Robertson April 2, 2015 at 11:27 am -

    Cavell,

    There are numerous ways to shop for a mortgage, including local banks, credit unions, mortgage brokers, online lenders, and so on. For purchases, borrowers typically like a face to face interaction, but it’s your call. As far as credit score, FICO considers multiple inquiries during a shopping period as one inquiry if made in a typical shopping period and also ignores recent inquiries. Either way, a 800 score shouldn’t be affected much by some mortgage inquiries.

  5. Wanda Clarence April 22, 2015 at 1:14 pm -

    Is it normal for a Bank to release closing docs at 7 pm on a Friday to be signed at 8:00 pm the same evening?

  6. Colin Robertson April 22, 2015 at 2:10 pm -

    Wanda,

    Things are rarely normal in the mortgage industry, so it is possible for a very late signing.

  7. Aaron April 24, 2015 at 2:09 pm -

    I’m currently in the process of applying for a jumbo loan, and my lender is making me jump through a lot of hoops. My liquid assets are over double what is needed for closing, but the lender wants me to document where every penny came from going back over the last 6 years even though it has just been sitting in the account for a long time. It all came from normal income and stock that is already documented in my tax returns, but now I have to go through and get transaction documents for every single part of income, which means making requests for around 10 different transaction documents a month for the past 6 years, which seems excessive. Is this normal, or should I switch lenders before it is too late? I have already provided several hundred pages showing my income and assets – going through and finding a couple thousand more to document each deposit (which again, is already covered with normal tax documents) is a lot of manual work.

  8. Colin Robertson April 27, 2015 at 9:48 am -

    Hi Aaron,

    I’m assuming there’s a reason they’re asking for all that documentation. Are you self-employed, run your own business? If so, things are often a lot more paperwork intensive. A jumbo lender may also have their own unique rules and underwriting standards, so another lender could potentially require less documentation, though there’s no guarantee you won’t deal with the same thing elsewhere.

  9. Angie B April 29, 2015 at 7:54 am -

    My question is. If I have provided all the documents requested for the underwriter will they contact my credit union to verify my account balance?
    Reason is…

    My loan application is supposed to come back from underwriter today so that I can get my closing date (which is scheduled for this coming Friday or Monday the latest *god willing*) They wanted to see so much money in my account which was over $2,000.00 more than I need for closing. Well last night I thought I broke my foot so I went to urgent care but they would not see me without paying my $100 deductible and a $20 copay then $20.00 for prescriptions. The only debit card I had on me was for the bank in which my mortgage company is going off of. I am going to transfer the funds back to the account this afternoon unless I have an approval or another request prior to that. I’m just nervous the documents I sent them Monday were up to date but then I did the withdrawal last night! Some please help!!
    Thank you

  10. Colin Robertson April 29, 2015 at 4:43 pm -

    Angie,

    Not sure they will need to contact your bank if you sent in asset documentation already, but if they do and have a problem with $140 missing, you’ve got an explanation and a plan to replenish the account.

  11. Kelita Kelly May 19, 2015 at 6:00 pm -

    I just want to tell you your information is great. I also read your answers to people that is so helpful.

    When I get ready to buy my home in the near future, you are the place I’m coming, because you helped people.

    Thank you

  12. Colin Robertson May 19, 2015 at 7:39 pm -

    Thanks for the kind words Kelita! People like you keep me going!

  13. Candice May 20, 2015 at 3:05 pm -

    HI Colin!

    I’m in the “hurry up and wait” phase of the mortgage process and I’m set to close on 6/1. Last month, when I originally got “pre-approved’ for the loan, I provided a ton of documentation. Documentation provided: 2 months of bank statements, 2 months of pay stubs, 2 years of taxes, Drivers license and my social security card. Since then, I have signed a ton of documents already inclusive of title docs, insurance and other disclosures.

    I’m told that 99% of the time, there is additional documentation requested. What typically is that “additional documentation”?

    I hope you can help, I only have 11 days until closing and I’m nervous that if they don’t tell me what additional documentation is required until next week that I might not have time to gather it.

  14. Colin Robertson May 23, 2015 at 8:00 am -

    Candice,

    Additional documentation could include a letter of explanation for anything they want more information on (shouldn’t take longer than typing it up), sometimes missing pages from said documents you already sent in, or more current documents, re-disclosed GFE, etc. Don’t stress, just comply and get the documents back in a timely fashion when asked.

  15. Tania May 24, 2015 at 1:29 pm -

    My daughter just graduated from college last year. She is a teacher and has taught for 1 year…so she does not have 2 years of W-2 forms. What is the best way for her to qualify for lets say a $180,000 loan?

  16. Angela June 17, 2015 at 5:49 pm -

    I am in the process of finalizing a loan for a mortgage. Me & my husband are separated and he is not going to be listed on anything as this is just in my name only. Why would the mortgage lender need a copy of his id? Just curious.

  17. Colin Robertson June 18, 2015 at 9:32 am -

    Angela,

    Not sure…best to ask your lender directly instead of speculating.

  18. Stephanie June 25, 2015 at 12:03 pm -

    My income is $71,000, my husband’s is 53,300. My credit is 640 due to late payments on my single girl mortgage about 5 years ago. His credit is over 710, and has $356 car payment. The house we live in now is in my name, but we can’t sell unless we take a huge loss, so we want to rent for the cost of the mortgage payment (1244/mo). How much do you think we could be approved for?

  19. Colin Robertson June 29, 2015 at 9:12 am -

    Stephanie,

    Only way to know for sure is to get a pre-approval at a bank or with a broker that reviews all your income, assets, liabilities, etc.

  20. Irene July 15, 2015 at 8:59 am -

    Going through the refinance process with my lender. I am self-employed and work full time for a consulting group. I have submitted everything from pay stubs, tax returns, P&L, Balance Sheet, employment verification signed by the managing partner here at work and now have been asked to submit a Written Verification of Employment. Isn’t that the same thing as the Employment Verification? Honestly, I am exasperated beyond words!

  21. Colin Robertson July 15, 2015 at 11:24 am -

    Irene,

    The fact that you’re self-employed but work full time for a company might be confusing the underwriter, or at least calling for all bases to be covered. I know it’s frustrating but if you can get the paperwork it’s best to just comply and move forward.

  22. Teresa July 15, 2015 at 4:42 pm -

    Question about the bank statements and VOD. Do lenders actually request a VOD from my bank even if I give them the statements? Is a VOD only done if no statements are available? I am wary about anyone going into my bank accounts. If they have the statements from my bank, is there still a need for them to do a VOD as well? Or should they not bother with that? Are statements good enough? I am self employed, so no paystubs or W2s. They have my taxes from the last 2 years and I will be giving them a profit and loss YTD as well. We are waiting for our other house to close before the funds for the new house and reserves will be in the bank account, which will happen in 2 weeks. The statements show my deposits from self employment. Is that all they would be looking at? Other then the balance? Or will a VOD still be necessary?

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