Mortgage Application

If you have not made a mortgage application recently and are thinking about refinancing with the current low mortgage rates or need to submit a mortgage application to purchase a home – be prepared to provide more documentation than you have with your prior mortgage application.

As the saying goes, “The times they are a changing…” seems to be a constant in the world of mortgage applications and the documentation required by lenders/banks. Last decade many lenders went with the mantra don’t worry about what’s on the mortgage application,  just apply and we’ll approve your mortgage application. For the betterment of our economy and society though it hasn’t been without pain those days are behind us.

Since the turn of the decade lenders have realized that just as earnings matter to stock performance a detailed and well documented mortgage application matters to loan performance. Lenders have gone back to asking for and requiring documentation of the information  on a mortgage application to be proveable and accurate.

Many borrowers got used to not providing hardly any information at all on a mortgage application to get loan approval and like anything that’s just been given to you a sense of entitlement has set in with many of those seeking mortgages. The fact of the matter is that since banks are loaning their money they are the ones that are entitled to see that everything on the mortgage application is provable and accurate.

It’s time to change our thinking that when submitting a mortgage application it’s not a hassle because banks/lenders want the documentation to back up what’s on the mortgage application to being happy that lenders/banks are again being prudent to whom they loan money.  Though it may take borrowers a little more time to gather the supporting documentation for the mortgage application in the long run everyone benefits especially our economy – because we will not have the foreclosure problems that effect every one’s property values.

Furthermore with these tighter lending prectices by banks/lenders on each mortgage application we can prevent further bailouts and real estate bubbles that lead to meltdowns. It may seem a little more painful to get everything needed to doucment yoiur mortgage application, but the reality is that’s the way it used to be and always should be.

Our advice is to work with an experienced mortgage broker or mortgage banker that knows exactly what’s needed upfront to document the mortgage application and can help minimize the “hassle factor”. Though be prepared underwriters today have been instructed to ask for further documentation to be on the safe-side on almost every file.

Like anything in life it’s about expectations. Know that whatever information you put on your mortgage application is going to have to be documented. That will help you set your expectations.

If it means anything, banks/lenders are treating everyone the same and asking for everything.

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