Lenders need a thorough understanding of your financial picture before lending you money, which means they may ask for your tax returns and audited profit and loss statements from last year. Furthermore, lenders must verify rental income for applicants who own properties which depend on that income as part of their income source.
Document requirements will depend on your lender and individual situation. Organizing early can help streamline and speed up the mortgage application process as well as increase your odds of approval.
Oshawa mortgage brokers can help you gather the required documents and complete the mortgage application process quickly and efficiently.
Lenders will review your bank statements to verify that the money you are using for a down payment and closing costs is actually yours, not borrowed from someone else (unless it was received as part of an official gift). They also want to see that any income deposits are regular without too many overdrafts.
Provide the last two months’ bank statements from each asset account you own, such as checking, savings, IRA and investment accounts. Make sure to include complete statements with every page numbered even if some are blank.
Your lender may ask for additional documentation regarding fixed debt such as student loans, car payments and alimony or child support payments. Bank statements should show evidence that payments have been consistently and on time – having these documents ready will speed up the mortgage process and help speed things along faster.
Lenders want to verify that you have a steady income that will enable you to repay your mortgage on time, so they require several documents showing this, including copies of recent pay stubs that reveal year-to-date earnings.
Pay stubs may or may not be required depending on your type of employment, with freelancers, business owners and self-employed people usually needing other forms of documentation such as tax returns and bank statements to verify their income.
Not only do lenders consider your earnings when determining a mortgage loan application, they’ll also consider debt obligations and expenses when assessing what kind of mortgage loan would best meet your needs. They may request copies of recent bank statements as well as copies of stock accounts such as mutual funds or 401(k). All this helps verify whether there will be sufficient funds available to pay your payments every month.
Tax returns are one of the required documents for obtaining a mortgage. Lenders want to see your tax documents, which provide a more complete picture of your income than pay stubs alone. Lenders typically request one or two years’ of tax returns with supporting documentation (for instance 1099s for dividend or rental income or Schedule Es for self-employed borrowers).
Tax documents detail your income sources and help establish how much of it qualifies for mortgage loan applications. Non-recurring income, such as company signing bonuses or boat sales proceeds won’t factor into these calculations.
Mortgage lenders carefully examine these documents to ensure you can afford your monthly debt payments on your new home and that you have been filing your taxes regularly, since unfiled tax returns could disqualify an applicant for home loans. Submitting requested documentation as quickly as possible allows mortgage loan applications to proceed more quickly.
Certificate of Eligibility
As part of the loan application process, borrowers are required to present documentation demonstrating they have sufficient finances to repay their mortgage debts. This may include bank statements, pay stubs, tax returns and W-2 forms as proof. Depending on your financing program requirements there may also be other documents related to income such as investment account statements or copies of cancelled rent checks that need to be provided as proof.
In addition, lenders typically require proof that non-employment income such as child support or alimony payments have been received through court decree and bank records. Lenders will also ask to see identification documents like driver’s licenses to verify your identity.
Arranging all the documents required can make your mortgage lending experience smoother and less stressful. To make sure that everything is in order, it is wise to prepare in advance by organizing all necessary files.