Income Verify Documents

Verifying income normally involves providing a number of official documents that will verify the level of income reported by the applicant. Generally, this will include these two types of documents:

• the W-2 form for the most recent tax year, along with a current pay stub.
• In the event the applicant is self-employed, 1099 forms for the previous calendar year may be utilized.

In both scenarios, the process for a full documentation loan normally involves providing copies of the state and federal tax returns for the two most recent years. Self-employed applicants may be required to include:

• Profit and loss statement.
• one additional set of annual tax returns.
• Sources of income such as Social Security, interest earned from investments or bank accounts.
• veteran's benefits may also be considered.

Asset Verify Documents

Along with the verification of income, the applicant for a full documentation loan will also provide proof of any assets currently in his or her possession. This will include details on all bank accounts, stocks and investments, and titles and deeds to property such as land or vehicles. For all financial accounts, the lender may also request copies of the most recent two to three month period.

Debts

The current amount of indebtedness will also be documented in a full documentation loan process. Every type of outstanding debt is included. This will mean all credit card balances, furniture, automobile, and student loans. In addition, the applicant will need to declare any child support or alimony payments that he or she is responsible for making on a recurring basis. Essentially, any type of debt should be reported as part of the process of obtaining a full documentation loan.

Traditionally, full documentation lenders offer lower rates because they lend to people and businesses with verified income and assets and usually higher credit scores. Working with a full documentation lender is the preferred option if you can document your income and have a high credit score because you will be able to take advantage of the best rates.