Gathering Your Documents

It’s now time for the Gathering of the Documents, an important ceremony in the mortgage application process when — okay, okay, we’re just kidding. There’s no ceremony — but you do need to get your paperwork in order.

You need that 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’ve still got the job 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)
Your proof of assets? Bring your:
  • Last 2 months of bank statements (all pages!!)
  • Investment portfolio statements
This is the most common handful 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 (since you likely won’t have them), but you’ll provide six months’ to a year’s worth of bank statements. It goes without saying these would be pretty impressive bank statements. The lender would determine your qualifying income by averaging out your statement balances.

These are pretty much all your options when it comes to gathering your income and asset documentation. 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.