What Documents Do I Need To Submit If I Have A Salary Or Hourly Wage?
Congratulations! If we’ve asked you to submit documents, that means you’ve been prequalified. Here, we’ll show you what documents you need to submit and where you can find them.
A: We want to make sure that at the end of the Landis program, you’ll get a mortgage and become a homeowner! These same documents will also be required by a mortgage lender when you apply for a loan. While Landis isn’t a mortgage lender, we want to review these documents to ensure that you have a clear path towards getting a mortgage at a budget that a lender would approve.
Why does a mortgage lender need to see these documents? Well, they want to make sure that you have consistent income, aren’t living beyond your means, and that you can be expected to make the monthly mortgage payments.
Q: That makes sense — so what documents do I need to send?
A: The short answer is, it depends! Your current employment situation will determine what documents are needed. For those who are salaried or hourly employees, here’s what we need:
W-2
Q: What’s a W-2?
A: A W-2 is an annual tax form that shows how much you earned for the year and the amount of taxes withheld from your paycheck.
This document will usually say Form W-2 on the top right or bottom left corner. Here’s some examples of what that looks like:
Q: When do I receive this?
A: Your employer is required to provide you with a W-2 by January 31 every year.
Q: Where can I find a copy?
A: If you don’t have a copy of your 2020 W-2, you can reach out to your employer and ask them to send you a copy.
Tax Return (Form 1040)
Q: What is a Form 1040?
A: The Form 1040 is used to file an annual income tax return. When sending this document to Landis, we need to see all of the pages included. Below is what the basic Form 1040 looks like (it will say Form 1040 in the top left corner on the first page).
Keep in mind that if you’re reporting any additional income or have any additional credits (child credits, education credits, etc.), your Form 1040 will have several additional pages.
Q: Why do I need to submit this too? Doesn’t my W-2 say what my income was?
A: Yes! While your W-2 does tell us how much you earned in the previous year, it only tells us what you earned from that one employer. The Form 1040 takes into consideration all sources of income. If you have additional income from a second job, unemployment compensation, social security income, or something else, it will be reported in the Form 1040.
Q: When do I file this document?
A: Your tax returns are usually due on April 15. In 2020, due to the ongoing pandemic and recent tax law modifications, the deadline to file federal tax returns was extended to May 17, 2021.
Q: Can you use my tax return that I filed last year?
A: You can use a previous return until the tax filing deadline. For instance, you’ll be able to provide your 2020 tax return up until April 15, 2022. After that, we’ll ask you for your 2021 tax return.
Q: Where can I find a copy of my Form 1040?
A: If you filed your tax returns through a tax preparer, online tax service, or CPA, they can provide a printed or electronic copy of your Form 1040.
If you still have trouble finding a copy, the IRS can help. The fastest way to get a Tax Return is through the ‘Get Transcript’ tool available on IRS.gov.
Pay Stubs
Q: What is a Pay Stub?
A: When you work for an employer, you receive a pay stub (also called paycheck, pay slip, etc.). This is a written statement of how much you worked, what you were paid, and what taxes were withheld.
Pay stubs come in all different shapes and sizes, but here are some examples:
Q: When do I receive these?
A: You receive this each time you receive a paycheck from your employer. Check with your employer if you’re unsure what your pay schedule is.
Q: Where can I find a copy of my 2 recent pay stubs?
A: If you don’t have your recent pay stubs on hand, you can always reach out to your employer to request copies.
Q: Why do you need to see my pay stubs?
A: We want to see that you’re working consistent hours and that your income this year is on track to be similar to what you reported on your taxes last year.
Q: I receive cash payments from my employer. Can you use that to verify my income?
A: Any income received in cash can’t be counted towards your usable income when applying for a mortgage. Mortgage lenders not only want to know that your income is consistent, but more importantly where the income is coming from.
Bank Statements
Q: What is a bank statement?
A: A bank statement is a document prepared by your financial institution each month. With a bank statement, you can see all of the income and spending activity related to the account.
A typical bank statement is multiple pages and covers all transactions (deposits, purchases, transfers, etc.) that you made during that time period.
Q: When do I get a bank statement?
A: Bank statements are issued once per month. Check with your bank to see what their statement schedule is.
Q: Where can I find a copy of my bank statement?
A: Most banks allow you to choose how you want to receive your bank statements. You can receive a paper statement in the mail, or you can have an electronic bank statement posted to your account. Usually, it’s possible to save your statement as a PDF on your computer or print it out. We recommend reaching out to your bank to request these statements if you don’t have them on hand.
Q: Can I just screenshot my current bank balance?
A: We won’t be able to accept a screenshot of your current bank balance. When reviewing bank statements, we need to be able to see the transactions you make and the deposits made into the account. As such, we need the full bank statement.
Q: What if I don’t have a bank account?
A: It is not possible to qualify for a mortgage without having a bank account. Without one, a lender can’t verify where your income is going or what you’re spending it on each month. We recommend setting up a bank account if you don’t already have one in your name — this will be crucial on your path towards homeownership.
If you need assistance setting up a bank account, we recommend you check out this article: https://www.nerdwallet.com/article/banking/how-to-open-a-bank-account-what-you-need.
By : Andrew Robitaille
Andrew is a Client Success Analyst at Landis, working tirelessly to help our clients achieve their homeownership goals.
Originally published at https://blog.landis.com on June 14, 2021.
