What’s an award letter, I asked my mortgage broker at Movement Mortgage. They requested “award letters” for retirement income, Social Security, Disability Income and SSI. We’ve bought more than 10 houses and never seen this request before. More important, I wanted to understand if the request was due to tighter mortgage rules, moving to a retirement state (Arizona), being retirement age (62) or the mortgage company?
An award letter is documentation that verifies your income when it’s being used to qualify for a loan. The most frequent use of the award letter is for mortgages, to confirm you receive this income each month. Don’t be surprised if you’re also asked for this letter when refinancing your home or requesting a loan modification.
Note: The award letter is also known as a benefit verification letter. Other reasons why you may need an award letter – to sign up for Medicare Part B; for housing assistance; to support application for state or local benefits.
Typical income sources that require an award letter include pensions, military benefits, Social Security, disability income and SSI (Supplemental Security Income) benefits. If you don’t have an award letter, you have to contact the organization making the payments, and request a copy. You should also expect the lender to request two months of bank statements showing these funds are being deposited into your account. Alternatively, you can provide copies of checks received and/or copies of your most recent 1099s (used to file your income tax).