When applying for a mortgage, the required documents will depend on how you earn your income. Below is a breakdown of what you’ll need based on your income type:
1. W-2 Employees
If you are a salaried or hourly employee receiving a W-2, you will need:
✅ Two most recent years of W-2s
✅ Two most recent pay stubs (showing year-to-date earnings)
✅ Two most recent years of federal tax returns (only required in some cases)
✅ Bank statements for the past 2 months (all pages)
✅ Proof of any additional income (e.g., bonuses, commissions, overtime)
2. Self-Employed Borrowers
If you own a business or are an independent contractor, the documentation requirements are different:
✅ Two most recent years of personal & business tax returns (all pages, including K-1s if applicable)
✅ Year-to-date Profit & Loss statement (prepared by you or an accountant)
✅ Balance Sheet (may be required)
✅ Business bank statements (if using for income verification)
✅ CPA or Tax Preparer’s Letter (confirming self-employment status)
3. Retired Borrowers
If you are retired and receiving Social Security, pension, or other retirement income, you will need:
✅ Most recent Social Security Award Letter (if applicable)
✅ Most recent Pension Award Letter (if applicable)
✅ Two most recent years of 1099s (for retirement income)
✅ Two most recent years of federal tax returns (if applicable)
✅ Two months of bank statements (showing receipt of income deposits)
✅ IRA, 401(k), or other retirement account statements (if using for income qualification)
4. Asset-Based or Capital Gains Income
If you are using assets or capital gains as income, lenders will require:
✅ Most recent two months of asset statements (checking, savings, investment accounts, etc.)
✅ Most recent two years of tax returns (showing capital gains if applicable)
✅ Documentation of IRA/Retirement Distributions, dividends, interest, or other recurring income
✅ Asset depletion calculation (if using assets as income I will help with this)
✅ Proof of liquidation (if funds are being withdrawn for down payment or reserves)
Other General Documents Needed for All Applicants
Regardless of how you earn income, you will also need:
✅ Government-issued ID (Driver’s License, Passport, or State ID)
✅ Social Security Number (for credit check)
✅ Proof of Down Payment Funds (bank statements showing sufficient funds)
✅ Gift Letter (if receiving gift funds from a family member)
✅ Explanation Letters (if there are credit inquiries, large deposits, or gaps in employment)
By preparing these documents in advance, you can help ensure a smooth and efficient mortgage approval process. If you have any questions about your specific situation, feel free to reach out at nick.ross@edgehomefinance.com or 720-250-7764!
