Buying a Home
What documents do I need to buy a home?
By Steve Lockhart
The short answer
For a financed purchase, the practical starting list is simple: a government-issued ID, two years of federal tax returns, two years of W-2s (or 1099s and business returns if you are self-employed), your most recent pay stubs, and about two months of bank and investment statements.
Full answer
For a financed purchase, the practical starting list is simple: a government-issued ID, two years of federal tax returns, two years of W-2s (or 1099s and business returns if you are self-employed), your most recent pay stubs, and about two months of bank and investment statements. Beyond that, your lender will request the items specific to your file, because every loan program and every borrower is a little different. Here is what each document tends to support. Your ID verifies who you are: a driver's license or passport. Tax returns and W-2s document two years of stable income and are used to build your qualifying income. Recent pay stubs, usually the most recent 30 days, confirm you are still employed at the same rate. Bank and investment statements, usually two months, show where your down payment, closing costs, and reserves come from and prove the funds are really yours. If part of your down payment is a gift from family, the lender will want a signed gift letter and the giver's bank statement for the transfer. If you receive alimony, child support, rental income, or Social Security, plan to document those as well. If you are self-employed, expect additional requests, such as profit and loss statements, business bank statements, and sometimes a letter from your accountant. If anything in your history needs explanation, a brief written note, say for a gap in employment or a credit issue, saves time later. A couple of practical cautions that borrowers learn the hard way: do not move large sums of money between accounts in the middle of the process without telling your lender, do not change jobs or take on new debt before closing, and do not close established credit accounts, because all of those can change your approval at the last minute. Keeping your finances quiet and consistent from pre-approval to closing is part of the job.
Go a little deeper
Frequently asked
Questions buyers often follow up on
Why do lenders want my tax returns if I am a regular employee?
Lenders verify steady, qualifying income from the full two-year picture, not just recent pay stubs. Tax returns and W-2s show that the income on your application is consistent, and underwriters reconcile them against your pay stubs before the loan is approved.
How much bank history do lenders review for my down payment?
Lenders commonly review the most recent two months of statements for the accounts that fund your down payment and closing costs. They want to see that the funds are yours, are not borrowed, and have been in place long enough to be sourced.
What do I do if part of my down payment is a gift?
Gifted funds are allowed under most loan programs with documentation: a signed gift letter from the giver, their bank statement showing the transfer, and a clear paper trail into your account. Your lender will tell you exactly what form their file requires.
The Lockhart Method
The Lockhart Method
Your Home | My Strategy | Proven Results
My strategy: gather the common documents before you talk to a lender so the pre-approval moves quickly, then keep the accounts quiet and the paperwork organized through closing. Preparation here is what lets a good rate stay a good rate.
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