July 12, 2021
Do you know the paperwork and documentation you’ll need to complete a home loan application? There are plenty of things you’ll need to gather–what follows is a list of items that are easy to overlook when you’re thinking about filling out an online loan application.
This list is not exhaustive–you should ask your loan officer for a complete list of that financial institution’s requirements–they aren’t always the same.
Authorization
The first thing to know about some home loan documentation requirements? Some of them are fairly non-negotiable.
For example, your lender must get copies of your credit report to complete your mortgage application. This requires all borrowers named on the mortgage application to give permission to the lender to do so and you cannot supply your own credit data to the bank.
The permissions needed may be done for FHA loans electronically with a digital signature or check box on the mortgage application form. In some cases, you may need to provide a signature on a digital or hard copy form but NEVER sign blank or incomplete documents.
Remember, the borrower cannot supply credit reports to the lender, they must come directly from the credit reporting agencies without passing through the borrower’s hands first.
Down Payment Documentation
When planning your down payment, keep in mind that you will need documentation for the source(s) of any down payment assistance you might be receiving including gifts, grants, or down payment loans.
Your lender is required to know the source of any down payment funds you provide yourself or that has been provided for you.
This includes details on where the money came from, how it was obtained (was it a loan, a gift, a grant, or your own funds set aside for the down payment). If you converted assets to cash for the purpose of the down payment, for example,
Don’t assume you know what the lender’s specific requirements are in this area–always ask first as standards and procedures will vary from lender to lender.
Income History, Employment History
Have copies of W-2s, your most recent pay stubs, and small business owners / self-employed applicants will need federal tax return information including your Form 1099s, a year-to-date profit and loss statement, and any other relevant tax documents you file as a business owner. All co-borrowers must do the same.
Be prepared to furnish bank statements, retirement and investment income statements, and documentation of your investments.
When applying for FHA home loans or any other type of single-family mortgage loan option your employment must be verifiable, be sure to provide contact information for your employer, address, phone numbers, fax numbers, etc.
Debt Ratio
If you are applying for the home loan (as opposed to getting pre-approved or pre-qualified) you will need to provide the lender with your monthly debt information including rent and other housing expenses.
Some debts may not affect your debt-to-income ratio, but you’ll need to discuss this with your loan underwriter to determine what should be submitted as part of your mortgage loan application.
Marital Status Information
This may not apply to all who need a home loan, but in cases where the marital status of the borrower(s) must be documented, (loans in community property states where a non-borrowing spouse may still need to have certain basic information included) you’ll likely need to provide information about the spouse’s employment and income.
You may need copies (never originals) of your marriage certificate or divorce decree, plus any relevant court orders that may apply. Ask your loan officer what specifics may be needed in cases like these, as lender standards will apply.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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