Are you ready for the mortgage application process?
Buying a new home can be extremely stressful. There are many things to consider when buying a home. Moving to a new neighborhood where you do not know anyone can bring on a lot of stress. So can getting to know the area and settling your children to new schools. However, the most stressful process in the home purchase process is the mortgage application process. Many folks are all upbeat when they first consult with their mortgage loan officer and by the time closing time rolls around, their mortgage loan officer is probably their least favorite person.
Why mortgage application process is so stressful?
Many tasks requested by the mortgage loan officer might not make a lot of sense for the mortgage loan borrower. For example, a mortgage loan officer will probably ask you for two months bank statements. You supply him your 2 months bank statements and all of a sudden he will ask you to go to your bank and get two months worth of printouts of your bank statements and get it signed by the teller and have the teller date it and stamp it. Do you know why you have to do the task of supplying your bank statements twice? On cases like these, your mortgage loan officer probably noticed that you have overdrafts on your bank accounts. Even though you only supplied him two months bank statements, there is a line item on every bank statement where it shows YTD overdraft fees. To avoid more explanations on why you have overdrafts on prior months, your loan officer probably will tell you to just get bank printouts. To you, as a borrower, might not make sense, but many things in the mortgage world do not make sense.
Deposits over $200 on your bank statements
If you have irregular deposits over $200 on your bank statements, your mortgage loan officer will probably ask you to write a letter of explanation and source the deposits. For example, if there was a deposit on your bank account for $10,000, your loan officer will ask you where you got that deposit. If you got it as a gift from your parents, the loan officer will probably ask for 30 days of bank statements from your parents account so he can prove the money leaving your parents account and going into yours.
Mortgage application process require patience
There may be time where you get a conditional mortgage loan approval and submit all the required conditions but then the underwriter will come back with more conditions. This is when mortgage loan borrowers get upset and start losing their patience. Your mortgage loan officer might ask you for update paycheck stubs and updated bank statements. You submit your updated paycheck stubs and bank statements and all of a sudden, the underwriter requests a letter of explanation why there was a $300 deposit and $1,000 withdrawal. They also want proof or cancelled checks. The mortgage application process require a lot of patience and you just need to submit whatever the lender requests from you. Your loan officer should explain to you the reasoning behind why so many requests are being made. You must realize that the mortgage business is one of the most regulated industries in the country.