You have to provide proof of income to those who you are looking to borrow money from, any other documents that they require are up to the financial institution. Some lenders may only need to see your latest bank statement or your bank statement for the last two months. Other lenders may require a bit more documentation than that, the documents required usually depend on the type of credit you�re looking for and the source of your income.
Lenders need to�verify bank account information�to make sure they aren�t lending money to anyone who would use it for money laundering and other illegal activities. Verification of income can be done for several loans.�
Verification of Income for Home Purchases
Banks, savings, and institutions that offer loans are known as mortgage lenders. Because of the substantial amounts of mortgage loans and their lengthy terms, institutions require something more than just a bank statement to verify income on the applicants.
While each lender�s underwriting guidelines can vary, borrowers need to prepare to show pay stubs, investment portfolios, and credit reports to get their loan approved. Combined, all these documents offer an idea about your total income which is reduced by the taxes you pay plus monthly expenses, which leads to your net income. A lender considers all these factors when they calculate your debt-to-income ratio to check whether or not you qualify for a mortgage loan.
Verification of Income for Rental Homes
If a prospective landlord wants to confirm your income, they may ask for recent pay stubs or an income verification letter from your employer. If your landlord requires it, you may also have to provide additional proof of income, but qualifying for a rental home is not as tough as qualifying for a mortgage loan. Some landlords only require tenants to list their income on the rental application without having to provide a long chunk of documents.
Verification of Income for Other Consumer Loans
Banks, savings, loans institutions, credit unions, financial institutions, and auto dealerships are some of the lenders you are looking to buy a new automobile, finance personal or household items, or get a personal loan. Based on the product you want to finance, the amount of the loan, and the lender, you may be able to submit your bank statement as proof of income.
Each lender has its own set of guidelines, which means you may have to provide additional income with proof of income to get the loans approved. You may need to collect pay stubs, tax return forms, credit reports, recent bank statements to show the lender your capability to repay the loan.�
Verification of Income if You�re Self-Employed
Getting loan approval is even tougher if you are self-employed. You may have to provide more financial documentation in comparison to those who have a job. Borrowers may need to provide a long history of income ranging from 1 year to 2 years. Tax returns, 1099 forms, and receipts of business expenses may be additional documents you�ll be required to provide to get loan approval.
Although your bank statement may also be required to confirm the deposits you have made to your account over time. Verifying the bank statements will help your lenders understand your financial situation a bit better.�
Verification of Income Using Financial Statements
If you�re self-employed, the IRS offers record-keeping guidelines to build a proper financial record. You can find the whole guide under IRS publication number 583. You improve your chances of getting a loan approval whenever you provide a well-organized and comprehensive financial statement to a prospective lender.
DIRO�s Document Verification for Bank Information Verification
With the rise of digital technologies, it has become easier for criminals to forge documents, do identity theft, and create synthetic theft. Cybercriminals tend to find a weakness in financial institutions’ systems and once they gain access, they tend to cause millions of dollars of losses before finally coming into attention. Banks and other financial institutions need to employ the right kind of technology to make sure they can minimize the risk of financial crime and money laundering.
Using DIRO�s document verification technology banks can verify online documents straight from the original web source. Banks, financial institutions, and FinTechs can use the award-winning technology to verify documents of all kinds. It can help in reducing costs and improve the efficiency of the overall document verification process for loan approval and customer onboarding. DIRO�s document verification technology can help you verify documents such as bank account holder information, bank statements, and proof of address, utility bills, student records, and driver�s license.
DIRO verifies documents and checks if they are original or fabricated. If the documents are verified, DIRO then uploads the documents on the blockchain which makes the documents immutable. Documents that are available on the blockchain can�t be tampered with.