Jumping through hoops

Mortgage Paperwork

Back in fourth grade this kid sitting two desks away from me seemed to be always getting picked on by the teacher. I remember he had the messiest desk and never completed all his class room work. I did not understand why he could never get it done, after all it did seem pretty easy for me. Ten spelling words, twenty maths problems and then do some major crayon work for an hour or so before recess. I mean really why make life tough for yourself.

It was the same at home. My Dad had us kids out of bed at 6 am every morning even on Sundays. We all had specific jobs to complete before 7 am then breakfast. Seemed simple enough to avoid a kick in the butt. After breakfast we did a few more chores and then we were sent outside to play – rain or shine. That’s just how it was everything was well organized and life was easier. Whenever we wanted to do something everything was right there and ready to go.

When taking mortgage loan applications and telling the clients what will be needed, it doesn’t take long to find out which clients are like the kid sitting two desks away. Past experience tells me those folks who had those chores to do before 7am are the ones who, without complaint, will have all there paperwork to me within 48 hours and are ready to go. These are the ones where I have actually closed their loans in under 12 business days and they are generally the ones receiving the lower interest rates.

The type of documents required to get are mortgage loan are similar in nature for most every person applying. There are different categories of people, those who work as employees for others or corporations, those who are self employed and then those who are retired. Each type of person has the same basic requirements and similar documents which must be provided.

It’s just amazing how people think you’re picking on them or having them jump through hoops when you are asking them to provide the same items you would anyone else.  The only difference is some people are well organized and have everything filed neatly at hand while others couldn’t find a pair of matching socks in their own dresser.

When you’re ready to purchase a home or apply to refinance, know and expect to have to provide proper identification, document all sources of income and all liabilities. Two of the most common items people still do not understand are a debt or liability is the credit card they pay off in full every month and the little house by the lake that is paid for.

As for the credit card balances, the day your credit is pulled if there is a balance on that card whatever that minimum payment is on that card, that’s what counts towards your debt to income ratio.

As for that other cottage on the lake or any other property you own, even if there is no mortgage on that property, you still have a property tax bill and insurance on that property. Both of these items are counted towards your debt to income ratios. A copy of both the property tax bill and the insurance declaration page in almost all cases will be needed to underwrite your loan.

This is all part of the “Ability to Repay Rule” and helping prevent mortgage fraud so we all don’t have to pay for another financial bailout in the future.

Remember no one is making you jump through hoops. We all just have to expect to be accountable and responsible.

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