Gather these essential documents for your mortgage.

To apply for a mortgage, you need 2 years of tax returns, 2 years of W-2s, 30 days of pay stubs, 2-3 months of bank statements and government-issued ID. Self-employed borrowers also need business tax returns and a profit-and-loss statement. Having these documents ready before applying can speed up approval by 1-2 weeks.

Income Documentation

Lenders verify your income to ensure you can afford the mortgage payment.

W-2 Employees

Document	Requirement
Pay stubs	Most recent 30 days
W-2 forms	2 years
Tax returns	2 years (federal only for most)

Pay stubs must show:

• Your name
• Employer name
• Pay period dates
• Year-to-date earnings
• Deductions and withholdings

Why 2 years: Lenders want to see stable, consistent income. Two years proves your employment isn’t temporary.

Self-Employed Borrowers

Document	Requirement
Personal tax returns	2 years (all schedules)
Business tax returns	2 years (if applicable)
Profit and loss statement	Year-to-date
Business license	Current

Self-employed income calculation:

Lenders average your net income over 2 years. If income is declining, they may use the lower year or deny the application.

Example:

• 2023 net income: $95,000
• 2024 net income: $105,000
• Average used: $100,000

Variable Income (Overtime, Bonus, Commission)

Income Type	Documentation Needed
Overtime	2-year history on pay stubs/W-2s
Bonus	2-year history, most recent pay stub
Commission	2-year history, employer verification

Lenders average variable income over 2 years. If it’s declining, they may exclude it entirely.

Other Income Types

Income Type	Documentation
Social Security	Award letter, 1099
Pension	Award letter, 1099-R
Disability	Award letter, 1099
Child support	Court order, bank deposits showing receipt
Alimony	Divorce decree, bank deposits
Rental income	Lease agreements, tax returns

Asset Documentation

Lenders verify you have funds for down payment, closing costs and reserves.

Bank Statements

Requirement: 2-3 months of statements for all accounts

What lenders review:

• Current balance
• Average balance
• Large deposits (must be explained)
• Overdrafts or NSF fees
• Source of funds

Include statements from:

• Checking accounts
• Savings accounts
• Money market accounts
• CDs

Large Deposit Explanations

Any deposit over 50% of your monthly income requires explanation and documentation.

Acceptable sources:

• Paycheck (matches pay stub)
• Tax refund (IRS letter or transcript)
• Gift from family (gift letter + donor’s bank statement)
• Sale of asset (bill of sale + proof of ownership)
• Transfer from another account (statements showing both sides)

Unacceptable sources:

• Unexplained cash deposits
• Loans from family (unless gift)
• Cash advances from credit cards

Marcus had a $5,000 cash deposit from selling his motorcycle. He provided the Craigslist ad, bill of sale and photos of the transaction to satisfy the lender.

Investment and Retirement Accounts

Account Type	Documentation
Brokerage accounts	2 months statements
401(k)	Most recent statement
IRA	Most recent statement
Stock certificates	Current valuation

Using retirement funds:

• 401(k) loan: Include loan terms
• IRA withdrawal: Document source and any penalties
• Hardship withdrawal: Additional documentation required

Gift Funds

If any down payment or closing costs come from a gift:

Gift letter must include:

• Donor’s name, address, phone
• Relationship to borrower
• Dollar amount
• Property address
• Statement that no repayment is expected
• Donor’s signature

Additional documentation:

• Donor’s bank statement showing they have the funds
• Proof of transfer to borrower’s account

Credit and Debt Documentation

Credit Report

Lender pulls this automatically—you don’t provide it. But you should:

• Review your reports before applying
• Dispute any errors
• Be prepared to explain negatives

Debt Explanations

Situation	Documentation Needed
Collections	Explanation letter
Judgments	Proof of payment or payment plan
Bankruptcy	Discharge papers, explanation
Foreclosure	Explanation letter
Late payments	Explanation letter

Explanation letters should include:

• What happened
• Why it happened
• What you’ve done to prevent recurrence

Rental/Housing History

Current Situation	Documentation
Renting	12 months canceled checks or bank statements
Living with family	Letter from family member
Own current home	Mortgage statements

Property Documentation

Purchase Contract

Required elements:

• Property address
• Purchase price
• Earnest money deposit amount
• Closing date
• All signatures

Homeowners Insurance

Before closing, provide:

• Insurance binder or policy
• Agent contact information
• Annual premium amount

Coverage requirements:

• Dwelling coverage equal to loan amount (minimum)
• Lender listed as mortgagee

HOA Information (if applicable)

• Monthly/quarterly dues
• HOA contact information
• Master insurance policy
• Reserve study or financial health documents

Identity and Legal Documentation

Government-Issued ID

Acceptable:

• Driver’s license
• State ID
• Passport
• Military ID

Must show:

• Photo
• Full legal name
• Date of birth
• Not expired

Social Security

• Social Security card or
• W-2 showing full SSN or
• Tax return showing SSN

Citizenship/Residency

Status	Documentation
U.S. Citizen	Driver’s license typically sufficient
Permanent resident	Green card (front and back)
Work visa	Visa, employment authorization
Non-permanent resident	Additional documentation varies

Divorce Decree (if applicable)

Needed if:

• You pay or receive alimony/child support
• You have joint debts with ex-spouse
• Property division affects your assets

Provide:

• Final divorce decree
• Property settlement agreement
• Child support order

Specific Situation Documents

First-Time Buyers

Some programs require homebuyer education:

• Certificate of completion
• Course provider information

VA Loans

• Certificate of Eligibility (COE)
• DD-214 (if veteran)
• Statement of Service (if active duty)

FHA Loans

Standard documentation plus:

• Explanation for any credit issues
• Additional verification for gift funds

USDA Loans

Standard documentation plus:

• Proof of income eligibility
• Property eligibility verification

Investment Properties

• Current lease agreements
• Rental income history
• Property management agreement (if applicable)
• Proof of reserves (6 months typical)

Common Document Mistakes

Incomplete Bank Statements

Problem: Submitting only the first page

Solution: Provide all pages, even blank ones. Lenders need to see “Page X of Y” on every statement.

Outdated Documents

Problem: Pay stubs or statements from 2+ months ago

Solution: Gather documents right before applying. You’ll likely need to update them during underwriting anyway.

Missing Signatures

Problem: Tax returns not signed

Solution: Sign all required pages before submitting.

Large Unexplained Deposits

Problem: Cash deposit without paper trail

Solution: Document all deposits before they happen. Keep receipts, sale records and transfer confirmations.

Inconsistent Information

Problem: Different addresses, name variations or income amounts across documents

Solution: Ensure consistency. If you use “Michael” on some documents and “Mike” on others, it creates questions.

Speeding Up Your Application

Before You Apply

Gather everything first. Having documents ready can speed up approval by 1-2 weeks.

Create a folder (physical or digital) with all documents organized by category.

Make copies. Lenders may request the same document multiple times.

During the Process

Respond quickly. Underwriters often have multiple files. Quick responses keep yours on top.

Provide complete documents. Partial submissions require follow-up and slow things down.

Anticipate questions. If something looks unusual, include an explanation proactively.

Document Checklist Summary

Income:

• 30 days pay stubs
• 2 years W-2s
• 2 years tax returns
• Business tax returns (if self-employed)
• Profit/loss statement (if self-employed)

Assets:

• 2-3 months bank statements (all pages)
• Investment/retirement statements
• Gift letter and documentation (if applicable)

Identity:

• Government-issued ID
• Social Security documentation

Property:

• Purchase contract (once under contract)
• Homeowners insurance binder
• HOA information (if applicable)

Other:

• Divorce decree (if applicable)
• bankruptcy discharge (if applicable)
• Explanation letters (if applicable)

Frequently Asked Questions

How far back do mortgage lenders look at bank statements?

Typically 2-3 months. They review your balances, deposits and spending patterns. Large deposits require explanation regardless of when they occurred during that period.

Do I need to provide all pages of bank statements?

Yes. Even blank pages must be included. Lenders need to verify they have the complete statement by checking page numbers.

What if I’m self-employed for less than 2 years?

You may still qualify if you have prior experience in the same field as an employee. Some lenders accept 1 year of self-employment with strong compensating factors.

Can I use digital documents?

Yes. Most lenders accept PDFs downloaded from your bank, employer portal or tax software. Some may request original documents for verification.

What if I lost my tax returns?

Request transcripts from the IRS using Form 4506-T or order them online at IRS.gov. Most lenders accept IRS transcripts in place of actual returns.

How long are mortgage documents valid?

Pay stubs: 30 days Bank statements: 60-90 days Tax returns: Valid for current year’s application Credit report: 120 days

You’ll likely need to provide updated documents if your closing is delayed.

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