Here's Your Homebuying Document Checklist
Preparing to buy a home? You may be curious: What paperwork do you need for a mortgage?
Primarily, you'll need financial documents that show your income, employment status, and recent bank transactions. But exactly what you'll need depends on your type of income and the assets you're using to qualify for the loan.
We'll walk you through the paperwork requirements and what you can expect to sign when you close on your loan.
Check your homebuying eligibility here.
What documents do you need to apply for a mortgage?
When you apply for a mortgage loan, you will be asked to complete a Uniform Residential Loan Application (URLA). As part of the mortgage application process, you'll also be asked to submit additional documents that will help your lender verify your income and assets.
The good news is that you don't need anything on-hand when you talk to the lender the first time. All you need is a general idea of how much you make, how much you have in the bank, and a few more personal details.
From there, it's the loan officer's job to send you a personalized list of items needed to process your application.
Still, if you'd like some idea of what things you might need, read on.
Get your personalized list of needed documents here.
Mortgage documents checklist
According to Bob Scott, a real estate investor and founder of Sell Land in Missouri, you may be asked to submit any of the following documents during the mortgage process:
- At least two years of tax returns
- W-2s from the past two years
- Recent pay stubs
- 1099 forms and profit and loss statements if you are self-employed
- Divorce decrees verifying alimony and child support payments, if applicable
- Bank account statements
- Proof of Social Security or disability income
- Stock or bond account statements
- Retirement account statements
- Proof of gift funds and gift letters, if applicable
- Documents for the sale of assets
- Proof of outstanding, long-term debts
- Letters of explanation for credit mishaps
- Documented rent payments if you currently rent
The documents in this list are not required to apply but may be required later in the process.
"Documents number 1 through 5 in this list support and verify your income. These are especially helpful for people with nontraditional forms of income," Scott says. "Documents number 6 through 11 cover your assets and liabilities. Underwriters use these documents to assess if you are capable of paying for the loan."
Documents number 12 through 14 are primarily related to your credit score, which is a huge factor in loan approval.
"These credit score-related documents help determine the loan terms you are offered. Additional documentation may be needed for this part of the process," adds Scott.
Don't know your mortgage credit score? Check it here for free!
You may also be asked for additional documents if you plan to liquidate any of them to come up with the down payment..
For example, "You may even be asked for car titles if you own classic cars as an investment," says Eric Klein, principal and president of Klein Law Group, P.A., in Boca Raton, Florida. But only if you are selling the vehicles, in which case you'll need a sale receipt and proof funds from the sale were deposited.
If you're selling crypto, you'll need to convert it into USD and keep a paper trail of everything.
Not all borrowers will need to provide the same documents. You will need to provide proof of income, whether that's from wages, self-employment earnings, Social Security Disability Insurance (SSDI), investment dividends, or other sources of income.
But you won't need to submit a gift letter unless you are using money from a friend or family member to buy the home. Likewise, you don't need a letter of explanation unless your lender asks for one to clarify an item in your credit history.
Note that you'll also be asked to submit a signed copy of your purchase and sale agreement on the home you are purchasing once you have an offer accepted.
What mortgage documents do you need to sign?
In addition to the documents you will be asked to submit, your lender will also require you to sign certain documents throughout the home loan application process. These include:
- The intent to proceed. "This notifies your lender that you wish to move forward in the mortgage process after receiving a preapproval," says Klein
- A loan estimate. This lists your estimated fees and costs associated with the mortgage, including the amount of interest you'll pay over the life of the loan
- Form 4506. "This text document allows your mortgage lender to check your tax returns you provide against those you actually filed with the IRS," says Wendy Barlin, a CPA and financial expert in Southern California
- Closing disclosure. "This reveals the amount due on the day of closing, which includes your down payment and any other closing fees. The sum is known as your 'cash to close' amount," explains Imani Francies, a loan expert with Loans.org. "Mortgage lenders must provide borrowers with a closing disclosure three days before the scheduled closing. This allows you to evaluate the disclosure and address any concerns"
- Closing documents. Signed on the date of closing, these can include agreements, certificates, forms, letters, receipts, and other paperwork that may be needed to complete the mortgage loan and the transaction
- Initial escrow disclosure statement. "This paperwork, normally signed upon closing, details the monthly escrow costs, including property taxes and homeowners insurance paid on your behalf - in accordance with the terms of your mortgage agreement," Francies says
- Transfer tax declaration. In some states, this is a mandatory closure document. It must be signed by all parties at or before you close on the home, according to Francies
Why is all this mortgage paperwork necessary?
A home purchase is one of the biggest financial transactions you'll make in your lifetime, likely involving six figures or more.
With so much money at stake, lenders want to make sure you're a reliable borrower and that you can afford your monthly mortgage payment. They're actually bound by federal regulations to verify your income and ability to repay before they can approve you for a loan.
So while submitting and signing all of these mortgage documents is tedious, it's also really important.
You can help the process along by being prepared before you even start your application.
"I highly recommend that you scan all your pertinent financial documents, such as bank statements and tax returns, and securely store them as PDF files securely backed up in the cloud. That way, applying for a mortgage can be relatively easy, as you can securely transfer your documents electronically to the banker or broker," advises Barlin.
Responding quickly to your lender's requests for information is key to closing on time. If you miss your closing date, the seller may be able to cancel the sale, keeping your earnest money deposit. That means you lose money and you lose out on the home, so do your part to keep your loan timeline on track.
"Read all this paperwork carefully. Make a list of questions to ask yourself while you read the fine print."
IMANI FRANCIES, LOAN EXPERT
Learn more: Ask a Lender: What's Your Average Mortgage Closing Time?
Often, it may be possible to request and receive copies of the closing documents you need to sign prior to your closing date. Doing so can allow you to review this paperwork ahead of time, examine any fine print, and consult with your mortgage lender, real estate agent, attorney, or another representative about anything you don't understand.
Once you have your closing documents, "read all this paperwork carefully," Francies says. "Make a list of questions to ask yourself while you read the fine print, review important terms, and jump to the end for information regarding fees and rates."
If in doubt about any of the paperwork involved, especially documents that need to be signed, "hire an independent attorney to review with you and explain the details," Barlin recommends.
The bottom line
Time is of the essence when you are hunting for a home and shopping for a mortgage.
Take the time to learn what is needed so that you can collect these materials, statements, and forms before applying for a mortgage loan and become familiar with any papers you will need to sign.
This can save time, streamline the process, and get you the funding you need more quickly, thereby improving your odds of landing the home you want at an affordable price.
Connect with a lender here.