A few years ago, taking a mortgage involved minimal steps; you would walk into a lender’s office and state your needs. However, many people have defaulted making their mortgage payments, putting lenders at risk. As a result, lenders require that borrowers present certain documents when taking out a mortgage. These documents help verify the credibility and genuineness of the borrower. Some of these documents you need to carry when taking out a mortgage in Salt Lake City include:
Renting History
This requirement applies to individuals who are first-time home buyers and have been renting a home. The lender will require that the lender present proof of making rental payments on time. The buyer can acquire the rental history document from the landlord or house agent. Paying rental payments proves that the buyer can afford to make the mortgage payments on time. Individuals with a good rental history are financially stable and have a great credit score.
Credit Report
A credit report refers to a summary record of one’s credibility. The credit score is a figure that expresses the credibility of an individual. The credibility of an individual is a result of the record of financial responsibility. A higher credit score indicates that an individual is creditworthy. There are institutions where you can get your credit report, which you will present to your lender. The lender may require a credit report for the previous year.
Bank Statement
Bank statements are a summary of the deposit and withdrawal statements of a bank account. Your bank provides bank statements to the customers upon request. The processing of the documents takes about three days. Lenders look at the bank statement to assess the financial position of an account holder.
Asset Documents
When taking out a mortgage, you will need to put assets as collateral. The assets serve as security in case the borrower does not pay up the amount. The assets can either be land, cars, or a house. You should produce documents to prove ownership of the assets when you visit a lender. The lender will take time to verify the authenticity of the documents, which must show asset ownership.
Pay Stubs
It is advisable that a borrower has a stable job to manage making the payments. Pay stubs are proof of income. An employer can provide the pay stubs for their employees upon request. A lender can assess the financial status of an individual by looking through the pay stubs. Self-employed individuals will need to produce documents that show their source of income.
Tax Returns
It is the responsibility of every responsible citizen to pay tax. For the lender to know if you have been paying your tax, you should fill a 4506-T form. The form gives the lender permission to obtain a tax returns copy from the relevant authorities. The tax returns ought to be within the previous year or the previous two years.
The role of a lender when taking out a mortgage is to assess your state as a borrower. You should be a low-risk individual with the proof that you can make mortgage payments on time. Sufficient proof for your borrower’s capacity should be accompanied by the relevant documents. Carrying these documents when going to take out a mortgage will shorten the application process.
