What Documents Do You Need to Get Approved for a Mortgage? by Informa Research Services

Business Wire, Sept 26, 2007

CALABASAS, Calif. -- Getting a mortgage home loan might seem like a tedious process, but if you do your part to look good on paper, you can increase your eligibility for the best interest rates (https://www.informars.com/equifax/). Financial institutions primarily consider three main areas in determining who is eligible for a mortgage: employment history, credit history, debt to income ratio (which is the percentage of income that goes to expenses). As proof of these, most financial institutions will ask for a selection of the following documents in considering your request for a mortgage loan.

Employment

    -- Last two years' federal tax returns and/or W-2 statements
       Financial institutions typically use your past tax returns as
       verification of your employment and earnings.

    -- Pay stubs
       Most financial institutions will ask to see your most recent
       pay stubs, usually covering the past month. Your pay stub must
       have your name, your social security number, your employer's
       address, and your year-to-date earnings. These help them to
       gauge whether you will be able to handle your monthly mortgage
       payments.

    -- Employment history
       While your pay stubs provide your financial earnings, your
       employment history gives the financial institution an idea of
       the nature of your employment. Generally, a record of steady
       employment is going to work in your favor.

Credit History

    -- Credit report, including current creditors and account
       information
       A credit report, including a list of your current creditors and
       the corresponding account information is useful to a financial
       institution because it allows them to see how you have dealt
       with your past loans. This list should include the details
       (i.e. minimum monthly payment and balances) of all student
       loans, auto loans, credit cards, and child support payments.
       By establishing a solid credit history, you can avoid having
       to pay higher interest rates that frequently accompany subprime
       mortgages.

Expenses and Payments

    -- Bank statements
       In order to verify your banking assets, financial institutions
       will most likely want to see up to three months of your most
       recent bank statements.

    -- Complete record of assets
       Additional assets that should be reported upon applying for a
       mortgage loan should include mutual funds, retirement accounts,
       real estate titles, and stock certificates. These not only

       promote your qualifications as a worthy risk for the financial
       institution, but they can also help you secure a lower interest
       rate.

    -- Canceled rent checks
       If you are currently renting, canceled checks that were used to
       pay rent can be proof that you are punctual with your payments.
       Some financial institutions may ask for the name and address of
       your landlord instead of the canceled checks.

    -- Information about desired property or property type
       Providing the financial institution with a description of
       either the property you want to finance or at least a
       description of the property helps the financial institution
       decide if any of the loan programs would be right for you.

Having these documents gathered and ready to go when you are in the process of shopping for a new home will help your mortgage application process go smoothly.

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