Compared to ten years ago, getting a mortgage nowadays will require a lot more paperwork. In the years before the Great Recession, it’s pretty easy to get a mortgage. Lenders would offer loans to people without thoroughly vetting them.
However, most borrowers did not have the means to afford their mortgages. It was a significant factor as to why the Great Recession happened. For this reason, Congress required creditors to thoroughly assess and do background checks on a borrower’s capability to repay any of their loans. The lender has to check a person’s debt-to-income ratio, assets, and credit history before finally agreeing to the loan.
The exact forms and documents needed when applying for a home loan depend on your current situation. However, the forms may vary, but a lender can usually have a good sense of how likely your loan will be approved by checking your bank statements, pay stubs, tax returns and W-2 forms.
But depending on your situation, here are some of the documents you will be required to provide when you want to apply for a home Mortgage loans San Antonio.
Mortgage lenders will want to check your financial situation so they’ll ask you to sign a Form 4506-T. It allows your lender to ask for a copy of your tax returns from the IRS for the past one to two years. This is done to see if your annual income is the same as the reported earnings via paystubs.
Proof of Income
Sometimes, lenders will want to check your pay stubs from the past few months to get a clear view of your current earnings. If you have other sources of income or is self-employed, you’ll need to show your direct deposits, 1099 forms or other proofs.
To check your risk profile, lenders will check your bank statement and other assets such as life insurance. These documents are usually requested to ensure that you have enough money reserved for mortgage payments in cases of emergency. Not only that, but they will also check how long your down payment has been in your account.
Using a written or verbal permission, your lenders will pull your credit report to assess you. You might have to explain if there are blemishes on your report. This includes writing a statement explaining the negative items on your report.
Good read: How to Maintain a Good Credit Score
If your family and friends gave you some money to help buy your dream house, you would need to show a written confirmation that the money was not a loan and is a gift. You should also include here your relationship with the person and the amount of money they gave.
Provide a photo ID to show proof that you are who you claim to be.
Buyers who don’t have a home may need to show proof that they can pay on time. If you are among these people, you’ll need to show a year’s worth of the checks that your landlord has cashed or any proof of your renting history.