Which document is typically used to confirm a borrower's income for a mortgage application?

The document that is typically used to confirm a borrower's income for a mortgage application is tax returns. Tax returns provide a comprehensive look at a borrower's financial situation over the course of a year. They include total income earned, deductions, any interest or investment income, and other relevant financial data that lenders consider when assessing a borrower's ability to repay a mortgage.

Tax returns are particularly valuable because they reflect all sources of income and can verify income accuracy over a longer period than other documents. For self-employed borrowers, tax returns often reveal net income, which is crucial for determining stability and consistency of earnings. Lenders rely heavily on this information when making approval decisions for a mortgage.

While pay stubs, bank statements, and W-2 forms are indeed useful for verifying income, each of these documents offers a more limited perspective. Pay stubs reflect current employment income, W-2 forms provide annual income information from an employer, and bank statements show deposits but do not detail the sources of income. Therefore, tax returns stand out as the most comprehensive document for confirming a borrower's income in the context of a mortgage application.