What Are Different Mortgage Documentation Types?

Mortgage Loans

A characteristic mortgage application is designed to get all of the pertinent information a lender needs to come to a decision whether a borrower should be approved for the loan type and amount they are looking for.

Your application can be turned in to the lender along with credit report, employment verification forms, tax records, pay stubs, rental verification forms, bank statements, asset documentation, appraisal report, and other documents.

The lender must understand what your income is and whether you are capable of handling the total new debt load if your loan is approved.

Documentation Level

Numerous lenders put forward to the borrower a chance to provide less supporting documentation along with their loan application.

These types of loans are regularly called “stated loan”.

You possibly can state your income but not establish it with pay stubs or tax records. Your stated income should be consistent with your job title and work experience. If you are a teacher claiming $50,000 per month in income you could have a problem.

You might be able to state but not prove other factors, such as your assets also.

A hybrid, half way method of documenting your loan is to state your income and provide your asset documentation such as your bank statements.

Loan Types

Mortgage lenders will often offer two documentation level options for the same loan. You can apply with either a full documentation loan or a stated documentation loan.

The benefit of a full documentation loan is the interest rates are usually lower. This be able to save you a bundle of money in the long term on your monthly payment and interest paid.