Gathering Your Documents

You need paperwork to prove your income, so you can show your mortgage loan officer you can afford the home you want and get the house. There are several ways to go about this.

Full Documentation

A full documentation loan means you have proof of everything — income and assets — that you’ve put down on your application. For your earning history, that’s:

  • Last 2 years of W-2 statements
  • Last 2 years of tax returns

Your mortgage loan officer also wants to see you are currently employed and that your income is going to continue to remain dependable and stable. To show this, provide you lender with:

  • Pay stubs from the last 30 days
  • Documentation for any other income: bonuses, alimony, etc.

You should also expect to provide proof that you have cash set aside for some large upfront costs. That includes:

  • Funds for a down payment
  • Funds for closing costs
  • Funds for 6–12 months of cash reserves (occasionally, depends on your loan)
Proof of assets includes:
  • Last 2 months of bank statements (all pages!!)
  • Investment portfolio statements

This is the most common set of documents you will need to provide to your mortgage loan officer, but it’s not the only option. You may be in a rare situation that warrants a different group of documents. Here are some other options.

6 or 12 Months of Bank Statements

This might be an option for those borrowers whose income is derived from their assets. You won’t show W-2 statements or pay stubs, but you’ll provide six months to a year’s worth of bank statements. The lender would determine your qualifying income by averaging out your statement balances.

Most borrowers will provide full documentation, but not everyone’s situation will fit traditional requirements. There’s no guarantee an alternative documentation loan will always work, but it could be a good option for some borrower’s situations.