When applying for mortgage loans, several documents are necessary to prove you can afford the home loan. These include pay stubs, W-2 forms, bank statements and tax returns.
Proofing your income is not as complicated as you might think. Tax returns are the most reliable way to demonstrate current earnings for a particular year, and lenders usually request these documents before granting you a mortgage loan.
Other forms of proof of income include unearned income and government documents such as unemployment benefits or workers compensation. While these documents can be reliable, they should not be relied upon solely as proof for long-term financial transactions.
Self-employed applicants can provide tax returns and other documents that demonstrate their business income. Lenders generally prefer tax returns over W-2 forms, though these can be more challenging for self-employed people to complete.
Another option is a letter from your employer. Usually written on official company letterhead, this document will confirm your employment status and income. Be sure to retain a copy of the letter for your records.
Obtaining a mortgage is an important decision, and you should ensure you possess all of the necessary documentation before applying. Having all of your proof of income documents ready to go will enable you to be approved quickly and without hassle.
You can find online resources that will guide you through the process and enable you to quickly download all necessary proof of income documents. Once the lender reviews your documents, they will contact you to discuss your application further.
Your exact requirements depend on your job type, but most lenders require pay stubs and W-2 forms. Additionally, make sure you have several months worth of bank statements handy for reference.
Once you provide these documents, they can give you a good indication of whether your income is sufficient for a mortgage loan. If not, you may look into ways to supplement it.
In addition to these documents, a pay stub can also be used as proof of income if you’re employed by another entity. Not only does it show your salary amount, but it may also highlight any deductions that might be eligible for.
Other ways to verify your income include asking for a copy of a recent tax return or providing a pension distribution statement if you’re retired. These documents won’t be as detailed as a tax return, but they should give an accurate picture of your past several years’ earnings.
Some lenders will accept your alimony, child support and other court-ordered payments as proof of income for your mortgage application. Be sure to verify these payments regularly to ensure they remain accurate and consistent.
