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Buying a house may be emotionally about finding a home.
Obtaining a mortgage is much less romantic.
It is about documentation.
Lots of documentation.
If your lender asks you for something that feels strangely specific, there is usually an underwriting reason.
The easiest buyer to work with is not necessarily the buyer with the highest income.
It is often the buyer who responds quickly and keeps good records.
INCOME DOCUMENTATION
A W-2 employee may be asked for documents such as:
- Recent pay information
- W-2 forms
- Tax-related documents when applicable
- Employment verification
A self-employed borrower may need a much more detailed file.
See Lisa's self-employed buyer guide for the income-specific picture.
ASSET DOCUMENTATION
The lender may want to know where your:
- Down payment
- Closing funds
- Reserves
are coming from.
That means bank and investment statements may become important.
LARGE DEPOSITS
This is where buyers accidentally create problems.
You suddenly deposit $15,000 in cash.
Your mother sends $25,000.
You transfer funds across three accounts.
Your lender asks:
“Where did this come from?”
That does not necessarily mean you've done anything wrong.
The lender may simply need a clear source and documentation.
Before moving large amounts of money during the mortgage process, ask first.
Learn more about what counts as a large deposit and how lenders source funds.
DEBT INFORMATION
The lender evaluates existing obligations.
- Auto loans
- Credit cards
- Student loans
- Other mortgages
- Support obligations where applicable
The purpose is understanding your complete financial profile.
IDENTIFICATION
Expect to provide acceptable identity documentation according to lender requirements.
SELF-EMPLOYED BUYERS
Business owners may need items involving:
- Tax returns
- Business returns
- Profit-and-loss information
- Bank statements
- Business ownership/history
- Other documentation
Different loan programs can evaluate self-employed income differently.
KEEP A DIGITAL HOME-BUYING FOLDER
Lisa recommends making one folder immediately.
Include:
- Preapproval
- Lender contacts
- Bank documents
- Employment information
- Insurance
- Property contracts
- Inspection reports
- Property DNA
- HOA documents
- Title/escrow information
By closing, you will be glad everything is in one place.
RESPOND TO YOUR LENDER
The lender asks:
“Can you send the updated statement?”
Buyer waits six days.
Then says:
“Why is closing delayed?”
Don't be that buyer.
If something is unclear, ask.
But keep the file moving.
