Getting Your Mortgage Application Documentation Ready

Mortgage expects documentation. Lenders commonly ask for it prior to assessing you. Documentation must be done carefully.

These requirements are quite specific and highly important. It is necessary if you want the lender to prepare the right papers that prove both your income as well as your assets. However, you should make it a practice to prepare such documents way in advance. Doing so will save you a lot of time and effort.


To begin, you must compile every little bit of information about your bank accounts. This also includes account numbers as well as the addresses of the branches. Take time out to prepare copies or duplicates of all your most recent statements. Do not forget to add the vital information regarding your savings and checking accounts! Additionally, you should also prepare the statements of these other things: liquid assets (for example, IRA retirement accounts), annuities, CD’s, as well as life insurance policies’ estimated cash values. It also would not hurt to prepare the valuations of your non-liquid assets like real estate or other valuables.


Your next step would be to create a documentation of your income. This is easy to do for as long as you have got the following: recent tax returns, W-2 withholding forms, and pay stubs. If you are of the self-employed status, you should also prepare the audited income statements for your business. Lenders usually do not need data spanning back to more than two years, but there might be cases wherein they will need to ask for additional information. If you find that your creditworthiness is already established, then it really pays to present the timely payment of your utilities and rent for the past one to two years. Lenders might also ask to see your legal documents like divorce papers to establish if there are any types of liabilities that may come up.


Before the housing meltdown, it was far too easy to get a loan that is competitively priced loan minus the need to provide any of the documentation mentioned above. They might now be very stringent in the past but over time these lenders ended up loosening their requirements. This then led to what is known as lender complacency, and as such there is a resulting proliferation called liar-loans. These are known as mortgages which do not need any sort of documentation, if at all.


There are cases wherein you might still need to get these loans, and lenders will recognize statements of income and assets (compared to just verified forms). Still, you might be able to expect a complete spread of full and complete documentation loans to be much higher than ever before. Based on one recent report, borrowers who are not as documented ended up defaulting more often than those who provide documentation and therefore end up causing a ruckus in their mortgage applications. Some even fail to push through with the process as a result.


As expected, documentation is necessary. The mortgage will push through lacking it. Therefore, one ought to carefully prepare it.

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