What is Verification of Income and Assets?


In order to get pre-approved for a mortgage, a mortgage lender will need to verify your income and assets. This will help to determine how much of a mortgage you can afford. It will also help determine what your interest rate will be.

What is Verification of Income?

A mortgage lender requests verification of income to see if you have the means to pay your mortgage payments each month. To confirm your income, a mortgage lender will request a few documents. Typically, you will need two years of W-2s, two years of tax returns, both federal and income, and two of your most recent pay stubs. In addition to this, you should also have ready:

  • Most recent checking account statements
  • Current savings account statements
  • Monthly debt obligations
  • Other loans in your name, including personal, student, and auto loans
  • Most recent credit card statement

To verify your income, the lender may contact your employer directly to confirm your employment. This gives the lender the opportunity to verify the information on your W-2 and pay stubs to ensure it reflects your income amount.

If you are self-employed, you’ll need to show the lender proof of a steady income. This can be shown through a quarterly or year-to-date profit/loss statement and at least two years’ worth of your business and personal federal and income tax returns.

It’s possible that forms of income verifications and document requirements can vary depending on your financial situation, so be sure to confirm with your lender what you will need to provide.

What is Verification of Assets?

Lenders will also want to verify that you will be able to pay the principal, interest, taxes, and insurance in the case of a financial emergency. This is determined by your assets. Liquid assets are those that are easily converted to cash, such as savings accounts, checking accounts, and stocks. Examples of documents you might have to submit to verify your liquid assets are:

Cash can be considered a liquid asset, but it must be seasoned. This means that the cash has been in a checking or savings account for a longer period of time, typically at least two months. Most lenders will want to see at least six months’ worth of liquid assets to plan for an unforeseen financial issue.

You can also submit non-liquid assets, which are assets that are harder to convert to cash, such as property, self-owned businesses, or artwork. However, these might be harder to liquidate in an emergency.


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