Real Estate Loans: Necessary Mortage Docs

The mortgage process to buy a home or even to refinance it is one that requires a lot of paperwork

. Some of these documents include a credit report disclosure, a Truth in Lending disclosure, a Good Faith estimate, and mounds of other documents. These documents compiled together allow the bank or other lender to get an accurate depiction of your income, credit report, bank statements, and your employment history as well which are all relevant in determining financing for you.

Once all the disclosures get signed the actual process to try to get the loan is allowed to continue. The lender is going to request some highly sensitive information about you and your financial status. Once you get approved, you will get an agreement detailing what exactly needs to be done to get the actual loan. These conditions are identified as "prior to document" because the loan documents will not be sent to escrow without them first being met.

Financial documents and personal identification documents are both needed in order to get the mortgage loan approved. Usually the person who is trying to buy the home submits the information directly. This information must be verified by the lender in some way, shape, or form. After financial information has been verified to be true, the process continues on. If any paperwork is missing, the process will be stopped until the proper paperwork is sent in.

Documents that are required to obtain a mortgage loan

The following are a list of documents that lenders are going to want to see before they will approve you for a mortgage loan.

Pay stubs are an absolute requirement. Each lender varies with how far back they're going to want to see before they approve you. Typically this is three months of stubs worth or if you're self employed up to a year of profit and loss details. If you happen to be retired, proof of that is also going to be required whether it's through a 401k or an IRA.

Bank account statements are another necessary part of the procedure for the past three months. These accounts include both checking and savings accounts that the borrower has.

A copy of the current rental agreement or lease for where the buyer is living is also another common piece of paperwork required. The lender may want to be certain that all rent has been paid on time and that you don't have any outstanding balances.

Employment verification is something lenders are going to look for as well. The buyers employer will fill this form out and submit it. It typically will have information on it such as the borrower's salary, how long they've been employed there, and whether their income is expected to be increased due to a raise or promotion any time in the near future.

Tax returns are yet another financial document required by mortgage lenders. Usually lenders want to see the past two years of both state and federal tax returns to get a bigger view on your financial situation past and present. Some may even want to go back as far as three years.

Documents Needed to refinance your mortgage

These documents are all needed to refinance as well but they also may want to see a copy of the current mortgage that is in place before going through the application for a refinance. The buyer can access this easily because it is a matter of public record. Sometimes the old lender must be contacted to get the proper paperwork but it should be a relatively quick process as long as it wasn't sold to a third party. Leniency is given if this is the case.

by: Lori English

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