A mortgage is about receiving money from an entity to finance the purchase of your home. And unless you are a cash buyer, seeking a mortgage is inevitable. For that to happen, you’ll need proof that you can repay the money without issues once financed. The assessment process will involve checking some mortgage loan documents. Even though your house acts as collateral for the mortgage, the lender aims to get the money back and not to sell your house to recover their money.¹
When you start the application process, you will need to provide your lender with some documents, as discussed below.
The Mortgage Loan Documents You Require to get Financing
The financial documents required will tell the lender a lot about your financial capability to repay a loan. They will check your income, debt to income ratio, credit history, credit utilization, and other information. These documents may vary depending on your financial situation. But they can give the lender an idea of whether you’re a good candidate for approval or not.²
Proof of Identity
You will be asked to provide a photo ID to prove you are indeed who you claim to be. A driver’s license will suffice in this situation.
Your Tax Return History
The lender will want to look at the history of your tax returns for either one or two years. This allows them to confirm that what you earn is in tandem with what you’ve reported being earning. There should be no huge fluctuations. In this, you may be required to sign Form 4506-T that allows your lender to request the Internal Revenue Service (IRS) to provide a copy of your tax returns.
Proof of Income
As a state employee, you’ll need to provide your pay stubs from the previous month. The tax returns report will have already shown where you stand financially. If you have other sources of income, you should provide proof as well.
Banks Statements and Other Assets
During the assessment of your financial health, the lender may request additional documents. This can be proof of ownership of other assets, bank statements, or life insurance. These documents help assess whether you can afford to repay the mortgage by other means if you lost your main source of income.
The statements prove that your down payment is available in your account and that you didn’t place it there for purposes of applying for a mortgage.
Your Credit Report
Your credit history is a crucial factor in determining your suitability to receive financing. It determines your credit score, which in turn determines your creditworthiness. With your written authorization, the lender will pull your credit history to check your credit score and other credit-related issues. Sometimes, you may be required to explain issues in your credit reports, such as a foreclosure or short sale.
Getting Your Mortgage Loan Documents in Order
Ensure you have the documents that may support your application for mortgage-ready. This can help shorten the approval time. Otherwise, before applying for a mortgage, you need to know how much down payment you can afford and monthly repayments.
“About Mountain West Financial and the CalPATH Home Loan Program
Mountain West Financial is the exclusive lender offering CalPATH, the #1 home loan program for Teachers, Police Officers, Firefighters, and other public employees who serve our local California communities.
You may contact our CalPATH Hotline @ 800-310-7577, seven days a week from (8:30 am to 8:00 pm). A CalPATH advisor will be standing by to answer (any & all) questions you may have about the home buying or refinance process.
We look forward to working with you soon!
Sincerely, Joe Moore – Branch Manager”
Links to External Sources:
- Buying a house? Here’s where all-cash deals are most competitive https://www.cnbc.com/2020/12/11/buying-a-house-heres-where-all-cash-deals-are-most-competitive.html
- How The Mortgage Underwriting Process Works https://www.forbes.com/advisor/mortgages/how-mortgage-underwriting-process-works/