Which documents should you have ready when applying for a mortgage?

When applying for a mortgage, it is essential to have proof of income, tax returns, and bank statements readily available. These documents provide the lender with a clear picture of your financial situation, which is crucial for assessing your ability to repay the loan.

Proof of income, typically in the form of pay stubs or a verification of employment, helps demonstrate your current earnings. Tax returns, usually for the last two years, offer insight into your overall financial health and stability, showing any additional income such as investments or self-employment earnings. Bank statements are also critical, as they show your savings, checking, and any other accounts that may illustrate your financial behavior and available funds for down payments and closing costs.

While other documents like insurance policies, rental agreements, and personal references may have their place in various contexts, they do not specifically address the lender's need for validated income and financial assets required to make an informed lending decision. Thus, having proof of income, tax returns, and bank statements is a foundational step in applying for a mortgage.