Requirements For Mortgage Verification and Validation
You will have to meet some requirements in order to obtain a home mortgage. Every home mortgage applicant must be able to provide a deposit, have a halfway decent credit score, provide verification of income and plenty more. Fail to meet these requirements and you will end up with a higher interest rate on your home loan or not be approved for a loan in the first place. Here is exactly what you will need to provide in order to qualify for a home loan.
1. Proof of Income
The home loan lender will verify your income through pay stubs, banking records, tax records and/or W-2s. The lender might go back as far a s a couple years or even longer to determine if you have a steady stream of income. Both federal and state tax returns will be analyzed. Have your checking and savings account information available as well. The lender will also request a copy of your debt obligations including school loans, car loan(s) and lines of credit.
2. Employment Verification
Every home loan lender completes an employment check prior to approving an applicant. The lender will make a telephone call to your employer prior to funding the loan. So be sure to stick with your job even if there is major drama or if something else goes awry. If you insist the time is right to leave your job, be sure to have another position lined up that provides just as much income or at least the same amount of income. This way, if your home loan lender finds out about your job switch, you will be able to justify the move as your salary will still be the same or even higher.
3. Asset Validation
The bank or other lender will ask about your current assets. Provide proof of savings and investments. However, if you simply print your financial statements from the internet, the pages probably won’t show your name or account number. You will need a more formal means of poof of assets so be sure to make copies of your financial statements before applying for a home mortgage loan.
4. Home Loan Lenders are Interested in Gifts You Receive
If you have received any gifts, your potential home loan lender will likely demand to see where the money is from to determine if it is an acceptable gift source. Provide the lender with your bank statement that shows the deposit as well as a copy of the gift source’s records to boot. A copy of the transaction that details the money transfer will also be necessary.
5. Home Loan Lenders Will ask About Paycheck Deductions
If your paycheck is deducted by child support, a wage garnishment, alimony or even a 401k loan, the prospective home loan lender deserves to know. Every alteration to your debt ratio should be documented down to the very last penny. If you are divorced, your matrimonial separation agreement that details your financial obligations must be provided. Information about your 401k loan must also be submitted prior to approval for a home mortgage loan. If you have too many debt obligations, the home loan lender will either decline your application for the loan or provide a loan with a higher interest rate.