Financial Records

A review of you income and expenses is necessary so that you can determine what you can afford to spend in purchasing a home.

For lenders to verify this information, though, they're going to need to look at your financial records. It is also important to remember that you should include records for each person who will be an owner of the house. So before you even meet with the mortgage lender, make sure you'll be able to provide copies of these important documents:

Paycheck Stubs, IRS W2’s
A lender will want to review your income for the past two years they will normally require a copy of you IRS W2’s for the past year and copies of pay stubs from two or three of your recent pay periods.

Bank Statements
In order to qualify you for a loan, most lenders will also ask you for copies of your bank statements. Ideally, they'd like to see a steady history of savings--or at the very least, that you're not bouncing checks every month.

Tax Records
It's always a good idea to save copies of your IRS tax returns, especially if you're self-employed. If you own your own business, it's important to note that lenders generally consider your income as the amount you paid taxes on--not the gross income of the business. If you have not reported your income lenders will not consider it.

Dividends & Investments
Lenders will usually consider long-term investment dividends, as well as your investment portfolio, when evaluating your income.

Alimony/Child Support
If you receive steady payments as part of a divorce settlement or for child support, you can also include this as part of your gross income. Just remember that lenders will want to see a copy of your divorce/court settlement verifying the amount of the payments.

Credit Report
Virtually every lender will want to see a copy of your credit report as part of the loan application process. The report lists all of your long-term debts, as well as your payment history. In general, they will require you to pay for the credit report (approximately $50).