Documenting your assets:
verifying down payments, assets, income and debts
A critical step in the mortgage loan application process is to verify the sources for your down payment, closing costs and assets, as well as documenting income and debts. The lender uses this step to determine your qualifications as a borrower.
Use my Application Checklist to gather the documentation requested by most lenders.
Down Payment(s) & Closing
Documenting that the down payment comes from your savings and that you will have savings and/or assets apart from the down payment gives the lender
confidence in your strength as a borrower and your ability to repay the
extra care to document the sources for any monies to be used for the down
payment or closing costs.
Acceptable down payment
& closing costs sources
Cash in a bank
Mutual funds / stocks
/ IRA / 401k
Proceeds from the
sale of another property
Gift from an
Collect information about your personal assets that add to your net worth and help to prove your
Common assets considered in a Mortgage Loan Application
Stocks, bonds, mutual
funds, 401k and retirement accounts
estimate - cars, boats, antiques, jewelry, etc.
Other real estate or
Income and Employment
lender will want to confirm your current gross income and have evidence of
stable employment. Documentation requirements vary depending upon a number
of factors, including the source of income.
Income sources can include:
- hourly wages
- salary wages
- salary +
- salary + commissions
- freelance work
lender will want to review a list of all your current debts. This along with
your credit report will provide the lender with a snapshot of your obligations. The lender will want to confirm that you will not be
overextended when the mortgage payment is added to your current debt load.
Here's a list of things you do NOT want to do if you are getting ready to apply for a mortgage or borrow money for your real estate purchase.