Home Buyer Income Documentation

There is no getting around the loads of paperwork that come with buying a home in the post-recession United States. Applying for a home loan in today's market feels quite different. Mortgage regulations require lenders to be more diligent in collecting home buyer income documentation which proves borrowers can afford their monthly mortgage payments. Whether your client is applying for a government-backed loan, a conforming mortgage loan or even a jumbo loan, they face the task of gathering and submitting a lot of paperwork.

Here are some of the most common documents borrowers will need to supply to satisfy income qualifying requirements when applying for a mortgage:

Salaried or Hourly Employees

• Most current 30 days paystubs
• Last two year's W-2 forms
• Last two year's 1040 Federal tax returns, all pages, and schedules
• Verification of Employment (VOE) completed by the employer and two-year history for bonus or commission income

Sole Proprietors or Independent Contractors

• Last two year's 1040 Federal tax returns
• Last two year's 1099's
• Schedule C from Federal tax returns
• Year to date profit and loss (P&L) statement
• Balance sheet (by request)

Partnerships, LLC's, S-Corporations

• Most current 30 days paystubs if applicable
• Last two year's W-2 forms if applicable
• Last two year's 1040 Federal tax returns, all pages, and schedules
• Schedule E Federal tax returns
• Last two year's schedule K-1 form*

*If K-1's reflect over 25% ownership, two years business tax returns and year to date P&L and balance sheet are required.

C-Corporations - 25% ownership interest or greater

• Most current 30 days paystubs if applicable
• Previous two year's W-2 forms if applicable
• Last two year's 1040 Federal tax returns, all pages, and schedules
• Previous two year's business tax returns, all pages, and schedules
• Year to date P&L
• Balance sheet (by request)

Retired Borrowers

• Federal tax returns, all pages, and schedules
• Social Security Income - Social security award letter
• Annuities and Pensions - Statement award letters and "paystubs"
• IRA's - Statement documenting minimum 3-year continuance
• 401K's - Statement of terms and conditions, last 60 days statements and minimum 3-year continuance

Temporary Leave - Maternity/paternity leave, short term disability or medical leave, etc.

• Last two year's W-2 forms
• Last two year's 1040 Federal tax returns, all pages, and schedules
• Verification of Employment (VOE) completed by an employer with the date of return
• Written confirmation of his/her intent to return to work
• Last 30 days paystubs for temporary leave income (if applicable)

A lender or underwriter may request additional items depending on the type of loan. In some cases, less documentation may be required if income from other sources or co-borrowers is not required to qualify for the loan amount in question.

Rest assured, our teams at PRM specialize in guiding homebuyers through the documentation process, providing support from beginning to end of the loan process for all of your clients. Contact us today!