To ensure that the mortgage lender is lending to the correct person and not an imposter, a valid form of identification will be required. The identification must be issued by the government and contain a photo. Acceptable forms of identification include a state issued driver’s license, state issued ID card, military ID, or passport.

Your lender may ask for your Social Security card as an additional form of identification. This helps to verify your identity and match your Social Security number with your picture ID to ensure that you are the one applying for the loan. Additionally, you will need to provide your Social Security number to run a credit check.

Your latest pay stubs are essential to confirm your monthly earnings and validate your employment status. If you receive payment via a physical check, you should have the original stub, which can be duplicated and forwarded to the lender. If you receive payment through direct deposit, your employer should have digital copies of your stubs. You may also be able to request electronic copies from your bank.

Bank statements are a necessary requirement for preapproval as they help confirm your income and ability to afford the down payment. Additionally, these statements can reveal any potential issues such as bounced checks, insufficient funds, unstable income, payments to other bank accounts, and large deposits from unknown sources. You will be asked to provide checking and savings account numbers and statements for each bank you have.

To obtain mortgage preapproval, you will need to provide certain tax documents, including your two most recent W-2 forms. These documents serve as an additional means of verifying your income and the amount of taxes withheld. You will likely be asked to provide W-2s from your current and past employers within the last two years. It is recommended that you keep a copy of your tax returns and W-2s. However, if you are missing some, you are able to request tax transcripts and tax returns from the IRS. Alternatively, if you used a tax preparer or tax software to file your taxes, they might also have copies.

Apart from savings and checking accounts, people also keep their money in other places. Additionally, lenders want to review all of your income and assets, which is why they will need to examine your investment account statements. These accounts include 401(k), 403(b), IRAs, stocks, bonds, and mutual funds.
Lenders typically review a variety of accounts when considering loan applications. In addition to investment accounts, they may also look at credit history, cash flow history and projections for the business, collateral available to secure the loan, and character

Your debt-to-income ratio (DTI) is a measure of how much of your monthly income goes towards paying off your debts. It helps lenders determine whether you can take on more debt or not. If your DTI is above the maximum limit set by the lender, you may not qualify for a mortgage loan. The maximum DTI varies depending on the type of loan.
To calculate your DTI, you need to add up all your monthly debt payments and divide it by your gross monthly income before taxes. Fixed debts are those that are regular, recurring, and have a minimum required payment. These debts include rent or mortgage, car loans, student loans, credit cards, personal loans, home insurance, etc.
Your DTI calculation does not include monthly variable expenses, which are subject to change and may include items such as utilities, groceries, entertainment, and transportation.

While your credit report is one of the only documents on the mortgage preapproval checklist that you won’t need to provide your lender, it’s still an important aspect of the preapproval process. Your credit report provides lenders with insight into the type of borrower you are and how well you handle different types of debt. It can reveal any red flags, such as late or missed payments, significant debts, and past bankruptcy. Lenders use your credit report to determine what mortgage rate your loan will have and the amount they’ll approve you for. Although the lender pulls the report on their own, it’s wise to review your credit score beforehand to ensure that you’re in a good position to qualify for a loan and to spot and fix any errors