When you are applying for a housing loan, there are a lot of things that you need to prepare for and it can be overwhelming. However, if you want to increase your odds of getting approved by a lender, you should make sure that you prepare all the necessary financial documents. 

Lenders will ask for important documents for your mortgage application to prove that you have the capacity to repay the loan. Depending on your particular situation, the exact documents you need to prepare may vary, too. 

Here are some of the most common mortgage documents lenders require from home loan applicants:

Tax Returns

What you’re going to borrow is not a small amount, so naturally, the mortgage lender would want to see the whole financial picture. You’re going to have to sign a Form 4506-T which will give the lender the permission to request from the IRS a copy of your tax returns. Most lenders ask for one to two years’ worth of tax returns to ensure that your annual income is the same as the reported earnings through pay stubs. There shouldn’t be any huge fluctuations from one year to the next. 

W-2s, Pay Stubs, and Other Proof of Income

Aside from your tax returns, lenders may also request for copies of your most recent pay stubs. While the tax returns will give them a clear picture of your financial health in general, pay stubs will show them your current earnings. If you happen to be self-employed or you have other income sources, you may be asked by your lender to show proof like direct deposits or 1099 forms.

Credit History

You can expect the lender to check your credit report. If your record is less than stellar, you may have to explain to the lender what that is all about, especially if that blemish happens to be a foreclosure or a short sale. To be ready for anything, make a statement explaining any negative item on your credit report. This will help the lender determine the kind of risk you are at. As you can probably expect, a one-time negative record will be seen differently from habitual delinquency.

Rent History 

If this is your first time buying a home, you may be asked by the lender to submit proof that you are able to pay on time. One such proof is a year’s worth of canceled rent checks. Alternatively, they may request the landlord for a document that shows you pay your rent on time. This document is especially important if you don’t have much of a credit history. 

Bank Statements and other Assets

The lender may also want to check your bank statements as well as other assets including your investments and insurance documents. These documents are requested so the lender can see if you have enough in your account to cover a few months’ worth of payment in case an emergency happens. They would also check to see if the amount for the down payment has been in your bank account for at least several months and not just magically in your account overnight.


By preparing the documents mentioned above and others that the lenders might request could help improve your chances of getting approved for a housing loan. It’s a good idea to have these ready so you can hand them to your lender straight away when they request these papers. This will also help speed up your application process.

Are you ready to apply for a housing loan? NetLending is here to provide you with tailored home finance solutions in Santa Ana, California, and Honolulu, Hawaii. Contact our team today to learn more about our rates and loan terms!