To obtain proof of income for a mortgage home purchase, borrowers must gather documentation that verifies their current and expected income. This typically includes:

1. Recent Pay Stubs: At least two consecutive pay stubs from the past 30 days, showing gross and net income.

2. Tax Returns: Two most recent federal tax returns (1040 forms) with all schedules, including W-2 forms and 1099s if applicable.

3. W-2 Forms: Form W-2 from the employer for the past two years.

4. Bank Statements: Three to six months of personal checking/savings account statements to confirm cash flow.

5. Bonus/Investment Income: Documentation for additional income sources, such as rental property income or retirement accounts.

Lenders may also request a Cover Letter explaining any gaps in employment or irregular income.

Lenders require proof of income to assess a borrower’s ability to repay the mortgage. Consistent income documentation mitigates default risk, which is critical given that U.S. mortgage defaults cost lenders over $50 billion annually (Federal Housing Finance Agency, 2022). The Federal Reserve reports that 92% of lenders mandate tax returns to verify income stability, as irregular earnings increase default likelihood by 34% (2023 Mortgage Bankers Association). Fannie Mae’s guidelines emphasize that documentation must align with income stability thresholds (e.g., 24-month history for self-employed borrowers). For example, a borrower with a $60,000 annual salary must show at least $4,500/month net income via pay stubs and tax returns. This process ensures compliance with underwriting standards and protects both lenders and borrowers. Without thorough proof, loan approval or favorable terms are unlikely, as 65% of mortgage rejections stem from insufficient income documentation (Consumer Financial Protection Bureau, 2023). Thus, meticulous preparation is essential to secure a mortgage efficiently.