The document list is not the same list for everyone

A salaried borrower with one employer and no side income is the file underwriting likes best. Everything can usually be verified in a day, and a written verification of employment is ordered at the end rather than the beginning.

What underwriting is testing: Underwriting is testing whether your income is stable, likely to continue for three years, and calculated the same way on the paystub and the W-2.

• Paystubs covering the most recent 30 daysYear-to-date figures are compared against the W-2 to catch bonus or overtime you forgot to mention.
• W-2 forms for the last two yearsEstablishes the two-year history the agencies require.
• Two months of statements for every account used for funds to closeAll pages, including the blank ones. Underwriting counts pages.
• Photo identificationIdentity verification and the patriot act check.
• Award letters for any pension, disability or social security incomeNon-taxable income can often be grossed up, which helps your ratios.
• A written explanation for any employment gap over 30 daysTwo or three honest sentences is usually the entire requirement.

If you own 25% or more of a business, you are self-employed for underwriting purposes, even if you also receive a W-2 from that business. The analysis starts with your personal returns and then moves through the business returns, adding back non-cash deductions and subtracting anything that is not truly recurring.

What underwriting is testing: Underwriting is testing your net income after write-offs, not your revenue, and whether the business can sustain the withdrawals you have been taking.

• Personal 1040s for two years, all schedules and all pagesSchedule C, E and F drive the calculation. A missing schedule stops the file.
• Business returns for two years (1065, 1120-S or 1120)Depreciation, amortisation and one-off expenses are added back to income.
• K-1 forms for every entityEstablishes ownership percentage and whether distributions support the income.
• Year-to-date profit and loss statementShows the business has not declined since the last filed return.
• Two months of business and personal bank statementsConfirms the profit and loss against actual deposits.
• Signed 4506-C formLets the lender pull a tax transcript directly from the IRS.
• Business license or CPA letter confirming the business is activeProves the business still exists on the day of closing.

Travel nurses, IT contractors, real estate agents and delivery drivers all land here. The employer calls you a contractor, the IRS calls you a sole proprietor, and underwriting reads your Schedule C.

What underwriting is testing: Underwriting is testing net Schedule C income averaged over two years, and whether the contracting relationship looks likely to continue.

• 1099 forms for two yearsGross figures that get reconciled against Schedule C.
• Personal 1040s for two years with Schedule CThe net figure after expenses is your qualifying income.
• Year-to-date profit and lossBridges the gap between the last filed return and today.
• Current contract or engagement letterSupports continuance, which matters when the history is exactly two years.
• Two months of bank statementsDeposit consistency, and sourcing of anything unusual.
• Mileage log or vehicle expense detailThe depreciation portion of the standard mileage deduction can be added back to income.

If more than 25% of your pay is commission, underwriting treats the variable portion on its own two-year average. A record year followed by a soft one does not average to the record year.

What underwriting is testing: Underwriting is testing the 24-month average of the variable portion, and whether it is rising or falling.

• Paystubs covering 30 days with year-to-date commission broken outThe split between base and commission has to be visible.
• W-2s for two yearsEstablishes the 24-month commission history.
• Personal 1040s for two years if unreimbursed business expenses are claimedThose expenses are deducted from qualifying commission income.
• A letter from your employer confirming the commission structureConfirms it is ongoing rather than a one-off.
• Two months of asset statementsStandard for funds to close and reserves.

Retirement income is straightforward to document and often stronger than it looks, because non-taxable income can be grossed up for qualifying purposes on most programs.

What underwriting is testing: Underwriting is testing that the income will continue for at least three years and that non-taxable portions are correctly grossed up.

• Social security award letter or benefit verificationEstablishes the amount and that it continues.
• Pension or annuity award lettersShows whether the payment has an end date.
• 1099-R forms for two yearsConfirms the distribution history.
• Two months of statements showing depositsTies the award letter to money actually arriving.
• Retirement account statements if drawdown income is being usedAsset depletion and drawdown income both require a documented balance.