Applying for a mortgage is all about giving your lender enough information to show that you’re a capable borrower. It’s common for questions to spring up in any business transaction, which is why it’s important to provide supplementary paperwork to clear these up. When potential borrowers send loan applications, they need to present supporting documents to verify their claims. The more proofs you can submit, the better your chances of getting approval.
Supplementing Your Mortgage Application With the Right Documents
Mortgage lenders typically have a list of initial information and paperwork that are necessary for applicants to submit. Although these requirements vary from lender to lender, the proofs you need to provide will generally be the same. This is why you should have the right responses to your lender’s questions with the corresponding paperwork to back up your claims.
In this article, we will share three important documents you need to prepare for your mortgage application.
- Bank statements for unusual deposits. You must disclose your funds to your mortgage lender to provide transparency of your personal inflows and outflows. A potential red flag for some lenders is the presence of unusual deposits that are beyond your monthly wages and earnings. Mortgage lenders can be dubious about your audit trail if there are large, unexplained deposits in your bank statements. If you want to gain their trust, it’s best to provide documentation that these are gift transactions through bank statements. You may even need a signed letter to prove that a relative or friend initiated the transaction. Clearing up these inconsistencies before they ask for it is an excellent way to prove that you have a good understanding of your inflow and outflows.
- Employment history. Mortgage lenders base their trust in borrowers by projecting their ability to pay for monthly charges. The easiest way to do this is by getting an employment history to check a person’s expected future earnings. Being employed for at least 2 years is good to have in your portfolio. If you’re jumping from one company to another, it may be a cause for alarm. As long as you take up work within the same industry, you may still get approved even if you have a shorter work history at your current employer. It will be trickier for self-employed individuals to provide viable work history, especially if they’re transitioning from being a salaried employee. They must wait until they have a 2-year account of verifiable income in the form of tax returns before it can count as employment history.
- Assets and liabilities. Your capacity to pay as a mortgage borrower doesn’t start and end with your monthly wages. Most lenders need proof of other assets and income sources, like Social Security benefits or side businesses. Additionally, you must be transparent about your payment obligations based on your credit report. You will experience delays for these corrections if you have any inconsistencies with the reported minimum payment and the credit you’re applying for.
Steelman Mortgages: Your Roseville Mortgage Broker
Supplying these requirements will give your lenders the right information to verify if you’re a viable applicant. Like in any business transaction, both parties need to know who they’re dealing with. Just as how your mortgage lender needs to understand your financial background, you also need to do your research on your lender. Ensure that you’re working with the right service by comparing rates, packages, and policies with different prospects. Doing the extra legwork will help you find the best service for your mortgage experience.
If you need a mortgage broker in Roseville, we’re the right company to call. Our veterans in the industry can connect you with the right loan packages for your needs. Call us today at (916) 847-7263 for more details.
