Mortgage: Necessary paperwork for a buyer.

 

 

Mortgage lenders may require proof of your assets, income, credit quality and other financial information.

Here are some documents you may want to gather in case the lender needs them:

1. Federal tax returns and W-2 forms from the past two years.

2. At least one recent paycheck stub showing your name and Social Security number, the name and address of your employer and your year-to-date earnings (some lenders will want the most recent month's worth of paycheck stubs).

3. Proof of other income: a second job, overtime, commissions/bonuses, interest and dividends, Social Security disbursements, VA and retirement benefits, alimony and child support.

4. List of creditors, including for credit cards, student loans, car loans, child support and alimony. You may be asked to show proof of your minimum monthly payments and total balances, too.

5. Investment records: mutual fund statements, real estate and automobile licenses, stock certificates and proof of other investments or assets.

6. Canceled checks showing mortgage or rent payments.

7. Home sales contract, including the purchase price, if you've found the house you want to buy.

Not all lenders and loan programs will require all of this documentation, and borrowers with very strong credit scores may need to provide little or any of it. But having it handy may save valuable time during the application process.

Here is a list of disclosures (besides the good-faith estimate) that your lender must provide to you within three business days from the time you apply for a loan:

Truth in Lending Act statement, or TILA
The federal Truth in Lending Act requires lenders to disclose in writing the terms and conditions of a mortgage, including the annual percentage rate, or APR, and other fees and charges.

Unfortunately, lenders may lawfully exclude certain fees, including property appraisal fees, title search and insurance fees, notary and some recording fees and credit report and flood certification fees, leaving homebuyers without an apples-to-apples comparison of loan costs.

Ask your lender to break down your TILA statement for you. If the information changes, the lender is obligated to provide you with an updated form at or before closing.

Servicing disclosure statement
Federal law requires your lender to disclose to you whether it believes someone else will eventually be your mortgage servicer -- that is, collect payments, handle disputes, send out escrow statements and perform other functions after a loan closes.

Affiliated business arrangement disclosure
In addition to these federally required forms, if you apply for a loan from a mortgage company operated by a builder or real estate agent, you should receive an affiliated business arrangement disclosure at the time the builder or agent refers you to that company. This form simply states that you are not required to use the services of the affiliated company and are free to shop for a mortgage elsewhere.