When you apply for a personal loan, auto loan, or mortgage, your lender will want to verify your identity, employment, income, credit, and assets. Being prepared with the documents that demonstrate your creditworthiness will not only help you to complete the application quicker, but it will also help your lender make their decision faster.
Depending on the type of loan, additional documentation may be requested to provide a decision on a mortgage application, but make sure to have these ready for any loan application:
How mortgage lenders verify your identity for a loan
In addition to deterring identity theft, lenders want to identify to determine if you’re a United States citizen or permanent resident and if you’re at least 18 years of age.
Two forms of identification from this list are usually required:
- Driver’s license
- Passport
- State issued ID
- Military ID
- Social security card
- Birth certificate
- Citizen certificate
How lenders verify your employer and income for mortgage
Lenders want to know that you have a stable job and have been employed at the same company for at least two years. If you haven’t been at the same company but have held an equivalent position at another company, that is usually acceptable, too. Try to avoid changing jobs from when your loan application is submitted until after you close on the loan.
- Paystubs – two weeks
- Tax returns – past two years
- W-2s and 1099s
- Bank statements
- Employer’s contact information or the person who manages human resources who can confirm you work for the company and your salary.
If you are self-employed, you can usually verify your income with these documents:
- Bank statements – at least the past two
- 1099 form
- Income tax returns
How mortgage lenders verify your assets for a loan
Mortgage lenders will want to see that you have the money to cover your down payment and closing costs and have saved at least enough for your first mortgage payment. Your bank and other financial account statements will prove that the money is ‘seasoned’ and hasn’t been deposited in cash the day before the loan closes.
Any recent large deposits that are not your regular income will need to be explained if they are not seasoned. If a family member has contributed a monetary gift towards your down payment, they will need to provide a gift letter to explain to the lender that the money is not to be repaid.
Learn more about Giving and Receiving Gift Money for a Down Payment.
How mortgage lenders verify your credit for a loan
Credit is a major determining factor for a mortgage application. Your mortgage lender will pull your credit score and credit report at the time of pre-qualification or pre-approval and when the mortgage application is submitted. They may do it again before your loan is closed if your initial score was just over the eligibility qualification or if there is a lengthy gap between the initial application and closing day.
The mortgage applicant and co-borrower should review their credit report before applying for a loan to ensure the accounts and information your creditors report to the credit reporting agencies are correct. You should also independently verify your credit score to ensure you have attained at least the minimum credit score of your loan eligibility requirements.
How to submit documents for a loan application
If your lender uses a digital verification service, you can upload your documents to their portal for review. Lenders who use a manual process to gather and analyze documents will likely request that the documents be emailed, faxed or mailed to their office. Be sure to copy every page of a bank statement, even if one page is blank.
Borrowers who use a FinLocker can upload copies of their ID, paystubs, and tax returns to the Document center in their app then securely share those documents along with their bank account information to their lender. FinLocker users can see their credit score and TransUnion credit report directly in their app.
