Checklist of Documents You’ll Need for a Mortgage

1. Income and Assets

Before approving your application, a mortgage lender must confirm you're capable of repaying your loan. You'll likely need to demonstrate steady income and employment for the previous two years. Your lender will specifically look at your gross monthly income, which shows your earnings before taxes and other deductions are taken out of your paycheck.

Their goal is to substantiate your income, including any large deposits that have come into your bank account. This is to clarify whether you're borrowing money for your down payment. If you are, this amount will count toward your debt-to-income ratio. If money is being gifted to you, the person providing it will need to supply a gift letter.

Be sure to put the following on your mortgage application checklist:

• Copy of your driver's license
• Copy of your Social Security card
• Pay stubs from the past two months
• Bank statements for checking and savings accounts
• Statements for investment accounts, including 401(k)s, IRAs, CDs and brokerage accounts
• W-2s and 1099s from the past two years
• If self-employed, your year-to-date profit and loss statement and documents to show unpaid accounts receivable
• Statements reflecting an accumulated cash value from a life insurance policy
• Down payment gift letters
• Documentation of alimony and/or child support you receive
• Documentation of any rental income you receive, plus a copy of the lease and a property appraisal report

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2. Spending, Expenses and Debt

Your financial liabilities are another important factor when applying for a mortgage. That includes essential bills, debt obligations and any other recurring costs. Your lender will look closely at these things to make sure there's room in your budget for a new mortgage payment.

Here are some basic documents you will likely need to provide:

• For every recurring debt payment you have (including credit cards, student loans, personal loans, medical bills and auto loans):

  • The lender's name
  • The account type
  • Your account number
  • Your unpaid balance
  • Your monthly payment
• Information about other financial obligations, such as your current rent or mortgage payment, utilities, memberships and subscriptions and cellphone bills
• Documentation of child support or alimony payments you provide
• Proof of monthly job-related expenses

3. Miscellaneous Documents

As your mortgage application moves through the underwriting process, the lender may require you to provide additional documentation. Every lender is different, but you might be asked for more information about:

• Your rental history, including contact information for previous landlords
• Your residency status if you're an immigrant

• Any other properties you own, including the:

  • Address
  • Property value
  • Status of property (pending sale, sold or retained)
  • Intended occupancy (primary residence, second home or an investment property)
  • Monthly expenses related to the property

• Any outstanding mortgages you have for other properties, including the:

  • Lender name and account number
  • Type of loan
  • Monthly mortgage payment
  • Unpaid balance on the loan
  • Credit limit, if applicable

4. Credit

You won't be responsible for providing your credit reports or credit scores, but you can expect your lender to pull this information themselves. Your credit health is a crucial factor when applying for a home loan. You'll likely need a credit score of 620 or higher to qualify for a conventional mortgage, but requirements vary by loan type. It may be possible to get a Federal Housing Administration (FHA) loan with a score as low as 500, though you'll have to make a larger down payment. Other types of mortgages may require a 700 minimum credit score.

You can visit AnnualCreditReport.com to get a free copy of your credit report from each major credit bureau (Experian, TransUnion and Equifax ). You can also get your credit report and FICO^® Score^Θ for free from Experian. Items on your credit report that could affect your mortgage application include:

• Past-due accounts
• Missed or late payments
• High account balances
• Inaccurate information
• Fraudulent activity
• New credit accounts

If there are any derogatory marks in your credit reports, you may be asked to provide a letter of explanation. If the problem is a thin credit file, however, your lender might suggest an FHA loan over a conventional loan. These are backed by the federal government and have more lenient requirements for credit scores and down payments.

The Bottom Line

Applying for a mortgage is an in-depth process—and most lenders will request documents to verify your financial information. Having a mortgage application checklist on hand can make for a smoother process and prevent unnecessary delays. It can also help you go into it feeling more confident about what's ahead.