In Minnesota, the law requires that lenders must document which aspect of a borrower’s financial capability?

In Minnesota, the law mandates that lenders must document income verification as a crucial aspect of assessing a borrower's financial capability. This requirement ensures that lenders have a clear understanding of the borrower’s ability to repay a loan. Income verification involves confirming the borrower's sources of income, such as employment wages, self-employment earnings, disability benefits, or other forms of income. This documentation helps lenders assess the borrower’s financial stability and serviceability of the mortgage debt over its term.

The focus on income verification is critical, as it provides a reliable measure of a borrower's financial strength and risk profile. By analyzing verified income, lenders can make informed decisions when underwriting loans and ensure compliance with state and federal lending regulations.