A Guide to Real Estate Closing Documents for Buyers Closing a home is a stressful endeavor. Although the exact forms may vary, Todd Huettner, owner of Huettner Capital, a residential and commercial real estate lender, says a lender can get a good idea of your likelihood of being approved by looking at your recent pay stubs, bank statements, Forms W-2 and tax returns taxes. Mortgage lenders want to know the full history of your financial situation. You may need to sign a Form 4506-T, which allows the lender to request a copy of your tax returns from the IRS.
Lenders generally want to see tax returns for one to two years. This is to ensure that your annual income is consistent with your earnings reported through paystubs and that there are no large fluctuations from year to year. Lenders can request to see your paystubs for the last month or something like that. Their tax returns help them have a clear picture of their overall financial health, while paystubs help them assess their current income.
If you are self-employed or have other sources of income (such as child support), you may need to show proof from your lender through Forms 1099, direct deposits, or other means.