Long gone are the days when asking for a home loan only required a handful of documents if any at all. Nowadays, asking for a home loan requires mountains of documentation the lenders use to verify your financial and personal life in depth. The reason why they need so much information is because there have been many people who try to commit mortgage fraud. So you can rest assured that they are doing this for your benefit as you wouldn’t want to end up falling victim to a mortgage fraud yourself.
However, if you have a basic understanding of what documents the lender will expect from you and you are organized enough to be prepared, then you can expect the process to less painful and tedious than it sounds. Getting expert advice from our Red Deer mortgage brokers will make the entire ordeal much easier to handle.
The very first document that you will be required to fill out is a requisite from our Federal Government, a mortgage application. There are three ways to fill out this document, online, verbally directly to the loan officer, or getting a physical copy of the document and filling it out. In any case, the information you’ll have to provide is:
- Full name, date of birth, social security number, and a phone number.
- Marital status, number of children if you have them and their ages.
- Your residence history leading up to the last couple of years. In case of being a renter, enter your rent payment records. In case of being an owner, then all previous mortgage documentation, insurance, and taxes.
- Employment history for the past two years.
- Income history from the last couple of years.
- Account balances from all your assets.
- Debt payments and balances.
- Proof you have not declared bankruptcy for the last seven years, or that you are not currently paying any other loan.
- Clarify if any or all your down payment will be borrowed.
After filling out your loan application, you’re going to have to provide proof to the lender so they can verify all the given information. The way to do it is to present a full set of documents to the lender.
- W-2 forms. Current and past employers.
- Payment stubs.
- Bank records.
- Tax returns from the last two years.
- A full list of your debts.
- A full list of your assets.
- Rent payment records.
- Credit statement.
- Profit and loss records.
- Divorce papers. (If you are divorced)
- Bankruptcy papers. (If you have)
Even though it may seem like a comprehensive checklist, the documentation required by the lender may vary from one lender to another and also it will depend on your personal situation, sometimes you’ll be asked to submit more documents or less and you will also need to preform a stress test to see if you will be able to financially handle the burden of a mortgage. When the lender asks for a new document, try to always deliver it as quickly as to possible, so the process can move faster.