Nearly everyone that comes to us comments on the amount of documents needed for a mortgage or refinance they have to provide us with. We know, it is a lot. In order to apply for a mortgage or refinance, we need the following documents.
Documents Needed
- Paycheck stubs for the past 30 days
- Two years of W-2 forms
- Two months of checking and savings account statements
- Copy of your driver’s license
Possibly needed:
- Two years of federal tax returns (if self-employed or own rental properties)
- Last quarterly retirement and investment statements
Each document is required by government regulations. The mortgage industry is highly regulated to help protect both lenders and buyers, and more regulations mean more paperwork.
Plus, believe it or not, each document tells us something different about your ability to repay your loan. If you’ve worked with us in the past, you may know that ensuring a client’s ability to repay their loan is extremely important to us. We would never advise anyone to take on a loan that we didn’t believe they could feasibly repay.
Keep reading to find out why these documents are required when you apply for a mortgage or refinance.
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W-2 Forms
We ask you for the past 2 years of W-2 forms to ensure you earn enough to make your monthly payments. The reason we need two years of these documents is to be confident that your income is stable. If the amount you make changes drastically each year, we may ask for an explanation or further documentation.
The original W-2 or a copy of the original document is required.
Paystubs
We require your paystubs for the past 30 days to show you are still making enough to repay your loan. The paystubs provided must include the following information:
- Borrower’s name
- Employer company name
- Year-to-date income
- Income paid on current paystub
- Date or date range of paystub
Examples of Paystubs – Traditional | Payroll Processing
Bank Account/Retirement/Investment Statements
Since we’ve already verified that you make enough to repay your mortgage, these statements allow us to make sure that you have enough money to cover the downpayment and closing costs without breaking the bank. We want to make sure you won’t have to drain your accounts, because emergencies do happen.
These statements must include the following information:
- Borrower’s name
- Bank or financial institution name
- Ending balance
- Full document including empty pages or those with minimal information
- Date range of statement
Copy of Your Driver’s License
This one is easy, so you may have guessed it already. We need a copy of your driver’s license to verify that you are who you say you are.
Federal Tax Returns
Similar to W-2s, we ask you for the past 2 years of federal tax returns to ensure you earn enough to make your monthly payments. Federal tax returns are needed if you are self-employed, commissioned, or 1099’d (Personal and/or Business 1040s).
Hopefully now that we’ve explained why these documents are required to apply for a mortgage or refinance, it will make compiling them for us a little easier.
Ready to start the mortgage or refinancing process? We can have you pre-approved for a loan in just a few hours.
Post has been updated from an original publication date of November 22, 2022.
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