Verifying your Down Payment, Closing Costs, Assets, Income, and Debts

Documentation required for most all mortgage loans includes (but is not limited to) the following:

One full month of paystubs
Two full months' bank statements, all pages, even if blank
Two full months' other asset statements, such as mutual funds, retirement accounts, etc.
Last two years W2s or full tax returns including all schedules
Driver's license
Social security card
Signed disclosures -- these are part of RESPA (Real Estate Settlement and Procedures Act).

A critical step in the mortgage loan application process is to verify the sources for your down payment, closing costs and assets, as well as documenting income and debts. The lender uses this step to determine your qualifications as a borrower.

Down Payment & Closing Costs
Documenting that the down payment comes from your savings and that you will have savings and/or assets over and above the down payment gives the lender confidence in your strength as a borrower and your ability to repay the loan.

Take extra care to document the sources for any monies to be used for the down payment or closing costs.

Acceptable Down Payment & Closing Costs Sources
Cash in a bank account
Mutual funds / stocks / IRA / 401(K)
Proceeds from the sale of another property
Gift from an immediate relative (must be mother, father, brother, or sister)

Assets
Collect information about your personal assets that add to your net worth and help to prove your credit worthiness.

Common Assets Considered in a Mortgage Loan Application
Stocks, bonds, mutual funds, 401(K) and retirement accounts
Life insurance
Other real estate or property

Income and Employment
The lender will want to confirm your current gross income and have evidence of stable employment. Documentation requirements vary depending upon a number of factors - including the source of income (hourly, salary, salary + bonuses, salary + commission, commission, self-employed, etc.).

Debts
Your lender will want to review a list of all your current debts. This, along with your credit report, will provide the lender with a snapshot of your obligations. The lender will want to confirm that you will not be over-extended when the mortgage payment is added to your current debt load.