When you’re buying a home, collating the paperwork for your mortgage before applying for it is a wise move. Tracking down documents can take time, so doing it well in advance could help you with wrapping it up faster.

Once you apply, you will need to carry a stack of documents to your lender. During underwriting, you will have to prove you can repay the loan. A mortgage application usually requires a paper trail to crosscheck the following:

Debts and assets

Credit history

Income and employment

Rent history

Other data like bankruptcy, divorce, or gift funds

Information About the Mortgage Application

The initial step in applying for a mortgage is filling a standardized form known as the Uniform Residential Loan Application. Every borrower has to fill this form, which states personal and financial details. This application is used by lenders to determine whether you are eligible for a mortgage.

The application is the first step where a borrower is simply stating information about themselves. That instantly graduates to a point where the bank needs the borrower to show them documents that support that application.

Income Verification

A request will be made by the lender for a few documents as a way of confirming that you can pay back the amount you have requested to borrow.

When lenders verify a borrower’s income, they’re looking for stability and consistency to ensure the borrower can afford the mortgage payments. To prove your income, you’ll need alimony or child support documents (if applicable), income tax returns, W-2 forms, or pay stubs.

A minimum of two years of steady self-employment in the same industry is required by most lenders for self-employed workers, freelancers, and independent contractors.

Assets and Debts

Lenders go through your debt obligations to get a figure for your debt-to-income ratio. They’ll be checking if you have the assets to be financially sound after the down payment and closing costs have been covered. Your mortgage application will need to list all monthly debt payments — credit cards, auto and student loans, existing mortgages — and assets like bank and investment accounts.

Credit Verification

Here, copies of your credit reports won’t be required, but the lender will request permission to examine your credit history. If you have derogatory marks, judgments, collections, or late payments on your credit report, you may have to hand over a letter explaining these items.