Gathering Your Mortgage Application Documents
Taking on a mortgage is an involved process. Lenders need to know a lot about you and your financial history before agreeing to a deal. Trust must be rapidly built, and you must demonstrate that you will be able to honour the agreed upon terms throughout the life of the loan.
Although the payoff is beyond worth it, preparing documentation for a home loan can seem overwhelming at first. Some loan representatives even entice people by claiming that they don’t require paperwork – a dangerous misrepresentation of information that creates far more stress in the long run.
In the end, all lenders will require the same documentation. Experienced professionals will be able to advise you on what’s important and what isn’t, potentially saving you time and effort. But there will always be a good amount of paperwork involved.
It may seem obvious, but the first and most important thing you’ll need is valid, legible photo identification. Your ID document will confirm your identity and your home address.
Just ensure that your ID won’t expire before your loan is expected to close. It must be valid through the date of closing. Photocopies are sometimes hard to read, so ensure that your presentation is crystal clear.
Personal pay documents
You’ll need to demonstrate your salary to your lender, as well as your hours and other considerations like overtime. Different income types are considered differently by lenders for tax and other purposes. A lender needs to understand your financial situation thoroughly. In addition, your personal pay documents will verify your current address and other important details.
If you’re self-employed, the required documentation will be more involved.
Lenders are required, by law, to study your income and assets so they can assess your capability of paying back the loan.
As such, you’ll need to provide tax return documents dating back two years. As with everything else, your lender and/or accountant can help you with the details.
Your bank statements dating back for the past few months will demonstrate your spending habits and your ability to pay your down payment. Money obtained from sources that are difficult to trace will not be counted towards your capability to pay off the loan. If lenders see large deposits, automatic withdrawals and other such transactions, additional documentation will be required.
At Mortgage House, we’re no strangers to the homeowner’s journey. It’s a long (but rewarding) one.
But don’t worry, we can help with that.
If you’re thinking of buying a home, you can contact us for advice about the best options for you when it comes to your mortgage. The cost of your mortgage can drastically affect your financial planning, so it pays to speak to the experts about it. Check out our bridging home loans online.