Mortgage Loan Documents Checklist for Buying a Home for Retirement

While lower interest rates can impact your retirement budgeting by effecting any annuities you may have, the current historically low interest rates might also serve as a catalyst for buying a new home in a 55+ community. The current attractive terms makes buying your dream home more affordable than ever, especially for those who will be financing their next buy with a mortgage. If it has been awhile since you have bought, it may not be a bad idea to review the mortgage loan document that you might need. Chances are you already have some idea but even if you are a pro, this handy guide can help you find those needed documents you will want to have on hand to secure your best possible loan. 

So, what are the most common mortgage loan documents you will need to secure a mortgage and take advantage of where interest rates are going? Well, high level you will want to have:

  • Employment records
  • Profit and loss statements (if self-employed)
  • Bank statements
  • Income records
  • Tax returns
  • And possibly: divorce decrees, bankruptcy papers, and a homes' sales contract

Now, let’s take some time to investigate each of these in a little more detail.


Employment Records


While you might be looking to retire soon, if you are still working showing proof of income is important because it shows the lender they are lending to borrowers who can pay them back. In order to benefit from lowered interest rates, and indeed to secure your best rate, you will need to gather up current employment records for all borrowers. That includes the most recent paystubs for the last 30 days. You will also need two years of W-2s, and 1099s if applicable. Since the loan approval process and house hunting can take a while, be prepared to send in updated paystubs along the way when asked.


Special Tip: If any of your paystubs show less than your usual hours include an explanation. For example, if you normally work 40 hours, but took a sick day or vacation and the drop in hours is not clear from the paystub write a small note explaining. Your goal is to provide the underwriter with all the information they need and answer any questions that might come up beforehand.

Profit and Loss Statements


What if you are self-employed or run your own business? How can you show to a lender that you still deserve to enjoy lower interest rates? Business owners who are using their self-employment income to qualify will need to produce a year-to-date profit and loss statement. If you have a bookkeeper or accountant, they can easily create that report for you. If you are on your own, remember, the P&L does not need to be complicated.

The main things it needs to list are:

  • Income
  • Expenses
  • Profit or Loss

To learn more, read the Small Business Administration article Profit and Loss Statements Explained.

And remember, the P&L is just another way a lender can determine your fiscal standing, so even if your company is not large, or represents an additional cash flow, you will want to include this information.


Bank Statements and Income Records


Not all of your cash flow and financial story comes from your income and employment records, and indeed, for many active adults 55+ a large chunk of your assets may come from retirement and investment accounts. To give your lender a good picture of your fiscal condition, you will want to supply at least two months of your most recent and consecutive bank, retirement, and investment statements for all of your accounts. Just like your employment records, be prepared to submit the most recent bank and investment statements again when requested to ensure you take full advantage of where interest rates are going.   

Special Tip: Make sure to include all pages even if the last page is blank. For example, if the bank statement shows 5 pages and page number 5 is blank–send in that last page anyway. It might seem silly but if you do not include it, the underwriter will request it.


Tax Returns


No one likes to pay taxes; but, this is another important area that your lender will want to check to make sure you are up-to-date. Because of that, you will also need to supply signed copies of tax returns for the last two years. If you do not have both years of tax returns don’t worry. You can order a tax transcript here on the IRS website.


Other Key Mortgage Loan Documents


Along with the normal items on the mortgage documents checklist, here are some commonly requested documents that may or may not apply to you as you apply for your new home.

  • Divorce Decree: If you are counting child support or alimony as part of your income you will need to show the court order along with your bank records proving you have been receiving it.
  • Bankruptcy: If you have had a bankruptcy within the last 7 years you will need to submit all of the bankruptcy papers, including the schedules and discharge date, to your lender.
  • Home Sales Contract: If you are selling your current home before buying a new home, you may be required to supply the complete sales contract on the house being sold.


Special Tip: Everyone's circumstances are different, so you may or may not need to supply additional documentation to take advantage of a lower interest rate mortgage. That being said, being prepared also means knowing your rights. Check out this article, Applying for a Mortgage: What Lenders Can and Can’t Ask, that can help you know when your lender might be asking questions that should not be applicable to your loan process.


Applying for a mortgage can often seem like a daunting task, even if you have already done it before. But, at Del Webb, we want to make your mortgage loan process as smooth as possible so you can spend more time enjoying the benefits of living in a 55+ community. We hope this mortgage loan documents checklist has been helpful to you and, if you are ready to search for your new home, and would like to do so from the safety of your own home, be sure to check out our helpful resources, like virtual tours that can help you find a home while social distancing.


Contributed to The 55+ Society 

Looking for more Society tips and learnings? Return Home here.

Published 4.20.20

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