(by Julia Jenson)

Paperwork involved in the mortgage application process is so extensive that you had better start gathering it a long time in advance. Full documentation will include:

• Federal tax returns from the previous two years.
• W-2 forms from the previous two years.
• A recent paycheck stub with your name and Social Security number, the name and address of your employer and your annual earnings on it
• You need to document your other sources of income, for example, income from a second job, overtime, commissions, bonuses, interest and dividend income, Social Security payments, VA and retirement benefits, alimony, child support.
• A list of your other debt obligations, such as credit cards, student loans, car loans, child support payments, including the minimum monthly payment and the balances.
• Investment records such as mutual fund statements, real estate and automobile titles, stock certificates and the like.
• Canceled checks that show your rent payments, or mortgage payments on your previous loan.

Recent years saw proliferation of more flexible documentation requirements that offer access to borrowing to people who for some reason cannot present papers verifying their income or assets or both. Lenders can waive disclosure or verification in return for a higher interest rate or larger down payments. For instance, self-employed borrowers cannot obtain documents disclosing their monthly income since it varies from month to month. A person who plans to move to a new city selling the house and quitting the job, can still qualify for the riskiest and most expensive no income/no assets plan where you do not need to disclose either your income or your assets.