Paycheck stubs, W-2s to prove income
Loan guidelines typically specify one month of verified income. You can prove this with paycheck stubs. Employees that are paid electronically may be able to access a corporate website to print out paycheck stubs.
Guidelines typically require the most recent Form W-2, but some borrowers are asked for two years of W-2s.
"If your loan hasn't closed by the time that new W-2s should be received by the employees, then (the lender) may ask for that, certainly," says Julie Miller, a residential mortgage planner for Broadview Mortgage Corp. in Tustin, California.
Bank, investment and tax documents
Borrowers generally must supply bank and investment account statements for the past 30 days. An application for a jumbo loan could trigger a request for up to three months of statements.
Almost everyone is expected to provide a recent tax return, including all the pages and schedules.
Borrowers also must sign IRS Form 4506-T, which allows the lender to get a transcript of the tax return from the IRS. This practice "has become an industry standard as fraud prevention," says Brad Blackwell, executive vice president and portfolio business manager for Wells Fargo Home Mortgage.
Tax returns are scrutinized for unreimbursed employee business expenses, self-employment business losses and telltale signs of loan fraud, such as reported income that doesn't match an employee's W-2.
Don't try to amend a prior year's tax returns to show more income. That's now a no-no.