Please ensure Javascript is enabled for purposes of website accessibility

Shopping for a Home? Here's What You'll Need to Get a Mortgage

By Matthew Frankel, CFP® - Apr 13, 2015 at 10:49AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The mortgage process can be very long, so anything you can do ahead of time can make a big difference.

Applying for a mortgage can be a long and complicated process, and one of the main reasons for this is the vast amount of paperwork involved. In order to jump-start the process, here's an overview of what you may need to get your mortgage approved quickly.

Documentation you will need
There are certain pieces of documentation all borrowers will need. You can expect your lender to ask for the following:

  • A copy of your driver's license.
  • A copy of your Social Security card.
  • Your last two years of W-2s and/or 1099s.
  • Your last two years of federal tax returns, with all attached schedules.
  • Your last two months of bank statements, including (but not limited to) checking, savings, brokerage, and retirement accounts.
  • Pay stubs from the past 30 days.

Source: 401kcalculator.org via Flickr.

Documentation you might need
There are also several pieces of documentation that don't apply to all borrowers. If any of the things on this list apply to you, be prepared for your lender to request it:

  • Corporate tax returns and YTD profit/loss statement (if you own a business).
  • Documentation for any large, non-payroll deposits into your bank accounts (usually over $500 is considered large).
  • If you're selling your current home, a copy of the sales contract or listing agreement.
  • If you're not planning to sell your current home, a monthly mortgage statement.
  • If you plan on renting out your current home, a copy of a signed, 12-month lease for the property.
  • A copy of your divorce decree or separation agreement (if that applies to you).
  • If you've been a renter, the address and telephone numbers of your landlords for the past two years.
  • If you have any derogatory credit information (late payments, paid collections, judgements, etc.), be prepared to have a written letter of explanation.
  • A letter explaining any recent credit inquiries and whether or not they resulted in any new credit cards or loans.
  • A signed gift letter (from whoever is giving you money), if some of your down payment will be coming from a gift.
  • Proof of veteran status (if applying for a VA loan).
  • Proof of any additional income, such as Social Security benefits or child support.
  • Titles for your cars and any other property you own.

It's better to over-prepare
There's a reason it takes so long to close on a home, and why many people experience delays when going through the process. Simply put, when you need to come up with a variety of different documents, things tend to get lost or forgotten about.

Bear in mind that this isn't even an exhaustive list. If there are any special financial or personal situations that apply to you, your lender could (and probably will) ask you for further documentation. However, gathering all of the items on the lists above (that apply to you) will give you an advantage going into the process.

As a final thought, one of the best things you can do when getting ready to apply for a mortgage is to over-prepare. Keep a file with an extra copy of every piece of documentation you collect for your lender, and make sure it's easily accessible if needed. It may take a little extra time to do this, but it's certainly easier than going back to your employer for another copy of your last W-2, or reprinting all of your bank statements.

If you do a good job of preparing for the mortgage process, you can eliminate a lot of the headaches, frustration, and delays that a lot of home buyers deal with.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
336%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.