What Information Do You Need to Get a Mortgage Loan?
When applying for a mortgage loan, prospective home buyers are required by lenders to provide certain types of information and documentation to support their qualifications for home-loan financing. Some documentation is required with virtually all mortgage loan applications, while others are asked for by the lender when certain situations arise in the underwriting process.
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Income and Employment Verification
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Likely, the most important type of information your mortgage lender wants is income information and verification of your employment. Employment verification typically involves a simple phone call to your human resources director. Income documentation varies depending on type of employment. Simple income documentation includes submission of pay stubs for several pay periods, notes the Home Mortgage Loans website. If you have other bonus or non-regular paychecks, documentation of this is needed. For self-employment income, copies of tax returns showing this income. Other less common income types include child support and alimony, or bank statements showing deposits.
Assets
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Along with ongoing income information, mortgage lenders want to know what other financial resources you have available. Lenders are not as likely going to concern themselves if you have restrictive income if you have significant financial assets available. Checking and savings account statements are commonly required. Additionally, if you have other investment accounts, such as stock accounts, IRAs and other accounts at your disposal, statements showing these balances are needed.
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Debts
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To determine your debt capacity, lenders calculate a debt-to-income ratio. Conventional lenders generally prefer less than 36 percent of your income goes toward debt, including your mortgage, car loans, personal loans and credit cards. Lenders typically derive this information by running your credit report, with your authorization, according to Home Mortgage Loans website. To do this, the lender needs all prospective lenders to provide Social Security numbers and personal information. Your credit report is used by the lender to determine your dependability as a borrower. The lender also totals your monthly loan obligations and calculates your debt-to-income ratio to decide your home loan debt capacity.
Property Information
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Finally, the lender needs details of the property you are buying to complete your mortgage loan and to prepare closing statements. On its checklist of things to prepare, Wells Fargo Home Mortgage includes your purchase price and down payment amount. To get the best rate and to avoid paying mortgage insurance, conventional lenders usually require a minimum down payment of 20 percent of the purchase price. An appraised property value is also required by most lenders. This is a hired service a buyer usually pays for to confirm that a purchase price is reasonable.
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References
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