## How Mortgage Lenders Verify Income
When you apply for a mortgage, the lender will need to verify your income to make sure that you can afford the loan. There are a few different ways that lenders can do this, including:
* **Paystubs:** Paystubs are the most common way to verify income. They show how much you earn each pay period, as well as how many hours you work and what your hourly wage is.
* **W-2s:** W-2s are annual tax forms that show how much you earned from your employer during the previous year.
* **1099s:** 1099s are tax forms that show how much you earned from self-employment or other non-wage income.
* **Bank statements:** Bank statements can show how much money you have coming in and going out each month. This can help the lender to see how much you can afford to spend on a mortgage payment.
* **Investment statements:** Investment statements can show how much money you have invested and how much it has earned. This can help the lender to see how much financial stability you have.
The lender will typically ask for documentation from two or more of these sources to verify your income. They may also ask for additional documentation, such as a letter from your employer or a signed tax return.
**How to Prepare for Income Verification**
Here are a few tips to help you prepare for income verification:
* **Gather your documentation:** The sooner you can gather your documentation, the sooner the lender can start the verification process.
* **Be prepared to explain any gaps in your income:** If you have any gaps in your income, be prepared to explain them to the lender. This could include things like maternity leave, a change in jobs, or a period of unemployment.
* **Make sure your documentation is accurate:** The lender will be checking the accuracy of your documentation, so make sure that it is all correct. This includes things like your name, address, and Social Security number.
**What Happens if the Lender Can’t Verify Your Income?**
If the lender can’t verify your income, they may not be able to approve your mortgage application. However, there are a few things you can do to improve your chances of getting approved, such as:
* **Provide additional documentation:** The lender may be able to approve your application if you can provide additional documentation, such as a letter from your employer or a signed tax return.
* **Get a co-signer:** A co-signer is someone who agrees to repay the loan if you can’t. This can help the lender to feel more comfortable about approving your application.
* **Make a larger down payment:** Making a larger down payment will reduce the amount of the loan that you need to borrow, which can make it more affordable.
**Conclusion**
Verifying your income is an important part of the mortgage application process. By being prepared and gathering the necessary documentation, you can help the lender to verify your income quickly and easily. This will increase your chances of getting approved for a mortgage and getting the home that you want.