Mortgage application: Documents and how to apply
Senior Content Writer
Know what types of documents you may be asked to provide and make a game plan on how to stay organized.
Know what types of documents you may be asked to provide and make a game plan on how to stay organized.
If you're a first-time homebuyer, then the process can seem overwhelming. This video series, presented by Chase Home Lending, translates relatable experiences into tips and tools that equip you for every step of your homebuying journey.
Quick insights
- Your mortgage application gives the lender detailed information about your finances, employment and the home you want to purchase.
- You typically have to submit paystubs, bank statements, tax returns, a government-issued ID and basic property information.
- After you submit a mortgage application, your lender reviews your financial documents and property information before making a loan decision.
Once you’ve found a home, and the seller says yes to your offer, what’s next? It’s time to complete a mortgage application and include a list of documents. Even if you’ve received a mortgage preapproval and compared options, the application begins the formal process of requesting a home loan from your lender.
Timing and preparation matter when you’re working toward a closing date. There are deadlines along the way. Understanding the documents needed on your mortgage application (or in follow-ups) and what they’re used for helps keep your home purchase on track.
Before you apply
Before submitting a mortgage application, taking several steps can inform and prepare you to apply:
- Review your finances: Check your credit reports and review your monthly income and expenses. Consider preparing some detailed notes on your existing debts and avoiding new credit applications.
- Estimate your homebuying budget: Consider the potential down payment, closing costs and monthly housing expenses—not only the purchase price. Calculators can help you budget before you apply for anything.
- Prepare cash reserves: As your budget gets clearer, you may want to set aside money. This would be for your down payment, closing costs and other homebuying expenses that could be due up front or soon after you get the keys.
- Compare lenders and loan options: Review potential interest rates, fees, loan terms and eligibility requirements before selecting a lender.
- Consider mortgage preapproval: A preapproval may help you understand how much you could be eligible to borrow, although it isn’t a guarantee of final loan approval.
- Find a home and make an offer: Depending on the lender and your circumstances, you may complete the formal mortgage application after the seller accepts your offer.
Mortgage application: Documents and information needed
Required and accepted documents vary, but here’s what you’re usually asked to provide:
- Personal information: Usually at least one form of government-issued identification, showing your full legal name, current address and birthdate.
- Employment and income details: Documents that detail your employment and income, such as recent paystubs, W-2s and tax returns. A lender may also request your employment history for the previous two years.
- Assets and liabilities: Bank or credit statements showing information about your savings, investments and properties, as well as existing debts (credit card balances, student loans or auto loans).
- Credit history: Your lender may review one or more credit reports and credit scores as part of the underwriting process.
- Property information: The address, purchase price and other relevant details about the home you want to purchase. An appraisal is usually needed to verify the home value.
Additional information that may be required
Your mortgage lender may want additional information based on your income, employment, financial circumstances or the type of property you want to purchase. For example, self-employed borrowers and buyers purchasing non-standard properties may need to provide additional documentation. Your lender could ask for this during the mortgage application or follow up with you after you submit.
Self-employed applicants
If you are self-employed, you may need to provide these documents to verify your income:
- Tax returns: If you own a business, the lender may need the most recent two years of personal tax returns and any business returns you filed for your company (for example, IRS Forms 1120, 1120S, Schedule K-1/1065).
- P&L: This outlines year-to-date business profit-and-loss statement for the current year if more than three months have passed since the end of the tax year.
Unique or non-standard properties
If you are purchasing a unique or distinct property, such as a multi-unit building or a fixer-upper, your lender may require additional appraisals.
How to apply for a mortgage
The steps in the mortgage application process vary by lender and circumstance, but here’s a general outline of how it works:
- Understand your finances: Taking time to understand your budget, review your credit health and gather your documents can help you streamline the process and make more informed decisions.
- Choose a lender and loan: Researching different lenders and comparing their mortgage rates, fees and loan options helps you understand the full field of your options. Consider speaking with a qualified Home Lending Advisor to determine the type of mortgage that suits your needs.
- Get preapproved: Many lenders offer mortgage preapproval, which provides an estimate of how much you can borrow based on your financial information. Preapproval may also strengthen your offer, signaling to sellers that you’re a serious buyer and that a lender has reviewed certain information. However, preapproval isn’t a guarantee of final loan approval. Additionally, your loan terms and eligibility can change after you apply and the property is evaluated.
- House hunting: With an idea of your borrowing power in hand, your next step is to pick out the home you’d like to purchase.
- Submit your paperwork: Once you have chosen your lender, loan and property, you’ll need to fill out the formal mortgage application. This is when you provide your lender with the necessary documentation for the review process listed above.
- Lock in your interest rate: A mortgage rate lock may protect your interest rate from market increases for a specified period while your loan is being processed. Ask your mortgage lender when you can lock your rate, how long the lock will last and whether any fees apply. You may also want to understand what happens if the rate lock expires before closing or market rates decrease.
- Loan processing and underwriting: Your lender will review your mortgage application, financial information and property details. This may involve additional requests for documentation or clarification.
- Close on your loan: If your mortgage application is approved, you could proceed to the closing stage, where you’ll sign the final paperwork and pay any closing costs. Once the closing is complete, you’ll become the official owner of your new home!
What to expect after your mortgage application
Once you submit your mortgage application, a detailed review process begins. Here’s what you can typically expect:
- Application review: The lender reviews your application and supporting documents. If anything else is needed before the next step, your lender will contact you.
- Property appraisal: The home appraisal is conducted to determine the property’s market value and make sure it aligns with the loan amount.
- Underwriting: An underwriter evaluates your application to ensure it meets the lender’s criteria. This may involve further verification of your financial details and, in some cases, requests for further documentation.
- Decision: If your application meets the lender’s requirements, you’ll receive approval for your mortgage. A mortgage approval may be contingent upon certain conditions being met, such as proof of homeowner’s insurance or making certain repairs to the property.
- Closing: Once all conditions have been satisfied, you’ll proceed to closing. Timing varies based on the lender, loan, property and how complete the required information is.
In summary
A mortgage application involves providing your lender with a detailed breakdown of your finances. Understanding the required documents and being prepared for potential follow-ups can help streamline the mortgage application process. A qualified Home Lending Advisor can help you prepare and guide you through a mortgage loan application. Having a trusted professional in your corner may help you make confident decisions along your homebuying journey.
Mortgage application FAQs
1. Do multiple home loan applications hurt your credit score?
Applying for multiple mortgages within a short period can temporarily lower your credit score. Each application may result in a hard inquiry on your credit report, which can slightly reduce your score. Multiple mortgage-related credit inquiries made within a limited rate-shopping period may be treated as a single inquiry by some scoring models. This period and the effect on your credit score can vary.
2. What are the reasons a mortgage may get denied?
A mortgage application may be denied for many different reasons. Lenders can mention insufficient income, a high debt-to-income ratio (DTI), poor credit, inconsistent employment, limited savings or issues with the property. A lender may also deny an application if it can’t verify important financial information with the documents provided.
3. How much is a mortgage application fee?
Mortgage application fees can vary based on the lender and the type of loan you are applying for. Speak with your lender about their application costs.
4. Can I cancel a mortgage application?
You can cancel, but you may still owe (or not be refunded for) certain fees already incurred, such as appraisal or other third‑party services, depending on timing. Inform your lender as soon as possible.
