Lenders request paperwork for mortgage applications that prove things such as how much money you make and how much debt you’ve incurred. The exact mortgage loan documents you may need will depend on your situation. For example, someone who is self-employed may have to provide different forms than someone who works for a company.

If you’re ready to dive into homeownership, you might be wondering what to do next. There’s a lot to do before you’re ready to start shopping for new furniture. Knowing what to expect and what steps to take can make the homeownership process much easier.

The most important mortgage loan documents are:

  • Good Faith Estimate – estimated costs you will have to pay before closing
  • Housing and Urban Development (HUD) Special Info Booklet – information about the home buying process
  • Truth in Lending Disclosure Statement (TILA) – information about the cost of credit
  • Broker Agreement – the contract about the terms of finding a loan with your broker
  • Loan Approval/Commitment – a contract about the terms of the loan itself
  • Settlement Statement (sometimes known as HUD-1) – a list of all closing costs and loan disbursements
  • Tax returns – Mortgage lenders want tax returns to get the full story about your financial situation. You may have to sign a Form 4506-T, which allows a lender to get a copy of your tax returns from the IRS. Lenders typically want to look at two years’ worth of tax returns to make sure your annual income is consistent with your reported earnings. Lenders also want to make sure that there aren’t any huge fluctuations in your income from year to year.
  • Proof of income – Lenders may ask to see pay stubs from the past month to have a clear image of your current earnings. W-2s may also be asked for. If you’re self-employed or have other sources of income, such as child support payments, you may be required to show your lender proof of this income through 1099 forms, direct deposits, bank statements, or other means.

When Will I Receive Each of These Documents?

You will generally receive your mortgage loan documents within these timeframes:

  • Good Faith Estimate – within three business days of filing a loan application
  • HUD Special Info Booklet – within three business days of filing a loan application
  • Truth in Lending Disclosure Statement – if you are seeking a purchase money loan, within three business days of filing a loan application. Most lenders will provide a refinancing or home equity loan when you first apply, but the requirement is anytime before closing.
  • Broker Agreement – immediately upon hiring a broker. If you are not using a broker, you will not receive or need this document.
  • Loan Approval/Commitment – some reasonable time before signing final loan documents. Ask for this as soon as possible.
  • Settlement Statement – at loan closing, but you should ask to review it one business day before closing.

How Do I Know How Much to Borrow?

If you’re wondering how much money you may be qualified to borrow, getting prequalified for a mortgage can be a useful step in the homebuying process. Getting prequalified for a mortgage is quick and easy to do.

Depending on the type of prequalification you choose, it may not even affect your credit score. You will need to provide basic financial information, such as debts owed, income, and owned assets. With this information, you’ll be able to answer what kind of houses you can afford and what monthly payments fit your budget.

How Do I Know What Kind of Mortgage Fits My Needs?

Every homebuyer’s financial circumstances are different, so you should tailor your mortgage to fit your needs. There are many types of mortgages; read on to find out which one might be the best fit for you.

  • Conventional mortgages. Conventional mortgages are popular for those with good credit reports. They generally have fewer restrictions than government-backed loans. However, conventional mortgages are not the only option available.
  • Federal Housing Administration (FHA) loans. FHA loans offer lower credit and down payment requirements for home buyers that qualify. If you are a Service member, a Veteran, or an eligible surviving spouse, a Veterans Affairs (VA) loan may be the best option for you.

How Do I Move Forward with a Mortgage Pre-Approval?

If you want to move forward with making an offer, getting pre-approved is a smart idea. Being pre-approved for a mortgage can give you an edge over other buyers in competitive markets. It also allows you to quickly move through the buying process once you’ve found a home.

Unlike pre-qualification, mortgage pre-approvals require extra paperwork, such as W-2s, pay stubs, bank statements, and tax returns. Pre-approvals also require you to provide your credit score and history. Once your lender has this information, they will be able to determine the loan amount you are approved for, so you can search for homes within your price range.

Pre-approvals only last for 90 days, so it’s best to wait to be pre-approved until you’re ready to start house hunting.

What Steps Should I Take to Get to Closing?

Once you’ve found a home and the seller has accepted your offer, here’s what you can do to finish the mortgage process, from application to closing.

  • Submit an application. Once you’re ready to apply for a loan, there are several documents you must gather. Since every mortgage process is different, the exact documents you need may vary. You will likely need:
    • Your ID and Social Security number
    • Your pay stubs from the last 30 days
    • W-2s or I-9s from the last two years
    • Proof of any other sources of income
    • Federal tax returns
    • Any recent bank statements
    • Details on long term debts, like car loans or student debts
    • Real estate property information

The U.S. Bank Loan Portal is one way to apply for a mortgage online. After signing up, you’ll answer questions, upload documents, and complete your application. Estimated closing costs will be provided to you initially or within three days as part of the mortgage application process.

  • Keep in contact with your lender. Your lender may ask you questions during the application process or need additional information. You will keep your application process moving forward by responding promptly to any requests.
  • Be patient. After submitting your application, the lender will schedule an appraisal to confirm the home’s value. The home’s value will then be compared to the purchase price. A title search will also happen to make sure there are no outstanding liens on the property. These steps work to help the buyer and lender.
  • Monitor your debt. Consider avoiding new debts or other financial changes while your loan is processed. Anything that affects your debt may impact your chances of being approved for a mortgage.

Do I Need an Attorney to Review My Mortgage Loan Documents?

It is highly advised that you hire a real estate attorney to review and walk through each step of this process with you. Real estate brokers may not have the expertise necessary to answer all of your questions and may often try to sneak in or ignore provisions that are not ideal. An attorney will be able to protect your rights and get you the best deal possible.