Every mortgage lender is making an investment in every approved mortgage application that they process. The idea is for the lender to gives the borrower the money that he needs to make a huge financial purchase like that of buying a house. And because the nature of such investment can come with a lot of risks, a mortgage lender cannot help but require documents that will help them verify the facet of your income, current debt and even the assets you already have.
If you are planning to apply for a mortgage loan, it is best to have all these documents prepared. They will ensure that you get the approval that you want before your dream house gets sold to someone else. Here’s a checklist:
- Payslip for the last two years. If you have a regular job and receive a monthly pay, it is best to prepare payslips for the last two years. The payslip will not only show the amount you are receiving monthly but the taxes that you pay as well. The paycheck will serve as your proof of income. After all, the lender wants the assurance that you’d be able to pay your monthly dues.
- Record of Profit or Loss if you run your own business. Such documents will show the financial history of the company, showing whether you are earning enough to cover not just the monthly mortgage payments, but the money needed to live by. If you haven’t filed your tax return yet, do it before you submit your loan application to avoid any delays in the application process.
- Current tax return records may be required by some lenders too. Expect the returns to be scrutinized to make sure that it matches the pay record you have also submitted. This is the step that most mortgage lenders take to ensure that the investment they are making on the property you wish to buy is in good hands.
- Credit Records may be one of the critical documents that lenders require. This report will ensure that you are earning enough to pay for all the debt you currently have and the mortgage loan monthly dues as well. The lender then calculates your income to debt ratio, making it the key factor in deciding whether to approve your application or not.
A mortgage loan application may require a lot of documents, but the approval will lift the burden off your back. When you have all these documents prepared, all you are left to do is to sit back and wait.