Home Buyer's Guide - closer look at...
Every lender requests some level of documentation in support of a loan application, though each has its own specific list of requirements. Most will require some or all of the items on this checklist in addition to a completed application form.
Copies of contracts.
The lender will want a copy of your purchase contract specifying the price and closing date. If you are selling your current home the lender may want to see the contract on that transaction as well.
Income verification documents.
The lender will want copies of pay stubs for the previous 2-4 weeks. Additionally, they may request tax returns with accompanying W-2 and 1099 forms.
You may be asked to supply contact information (name, address, phone number) for your employer to allow the lender to verify your information.
Credit card and installment loan information.
The lender may want to see copies of several months credit card statements, as well as payment books or statements for car loans and other consumer debts.
You may be asked to provide statements for bank and brokerage accounts for the past 2-3 months.
Proof of down payment funds.
Some lenders require verification that the buyer has the required funds to cover the down payment and closing costs. If any portion of the down payment is being provided by others (family members, for example) the lender will probably require a letter stating that the funds are a gift and not a loan. This is often called a gift letter.
Some lenders may require copies of car titles and ownership documents for other major assets. If relevant, divorce or bankruptcy paperwork should be provided. Borrowers who are relying upon income from a legal settlement or similar source will need to provide documentation.
Are You Self-Employed?
Most lenders apply more stringent standards to self-employed applicants. They may request business tax returns and financial records as well as more extensive personal information.
No & Low Doc Loans
Some lenders offer loan programs that require a far lower level of documentation than a typical application. These loans are targeted to self-employed and other borrowers who may not want to provide the level of documentation normally required.
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