Let’s face it — the mortgage approval process has changed since our country’s last recession whether you live in Bryan, College Station or New York. And these changes have certainly not made the process any easier. Yet, perhaps the conventional conclusion on which aspect of the process has grown difficult can be set aside. Actually securing mortgage approval isn’t where the complication comes in: it’s the rigorous, wearisome process of meeting the documentation requirements. And these requirements are now the same for everybody, from New York City to the Brazos Valley.
Yet, how can we blame them? After the mortgage crisis only a few years back it became clear that new measures needed to be taken. And, I can assure you, they are satisfactory. From 2007 to 2009, the percent of resold loans went down from 22% to 2%. These numbers have helped secure the current state of our national mortgage rates, but they have also posed a stressful consequence upon potential home mortgage consumers. While we may temporarily be out of the recession-causing threat of our nation’s mortgage dilemma, it has never been more difficult to successfully secure a loan.
The difficulty, as stated above, doesn’t come from obtaining mortgage approval, but instead through the intense, endless amount of documentation which must be processed and evaluated by a careful, experienced team of lenders. However, this process does not have to be as painful for the prepared. In essence, be ready to give them every last aspect and detail of your financial life: every dollar in your checkings, savings, investments, and retirement accounts must be accounted for, as well as every other potential source of income (such as gifts, grants, loans, etc.). And be prepared to cough up the paperwork. Give them everything they ask for. If you don’t, they will only call back asking for more. And when they do, they might be aggravated or stressed, which might heighten your own frustration and so on. All in all, for the smoothest, simplest transitions, give them what is necessary.
It all begins, of course, with the pre-approval process. This will typically consist of a phone call carried out like a kind of telephone interview. There will be plenty of critical questions which you will have to answer on-the-spot. Preparation is key in this stage, and honesty is just as crucial. Be ready to disclose everything. They will ask questions from what you do for a living to whether you’ve owned a house before (if you have, prepare the numbers). You will want to be specific here, and don’t hold anything back.
It might be easy enough to fraud your way through the telephone interview, but under the new measurements required for loan security, it will all come down to the evidence. You will have to prove everything that you say in the phone interview, and if numbers don’t add up appropriately you may find it hard to finish out your approval. But this isn’t where most people find themselves struggling. The true test comes with the processing of documentation. This seemingly endless ritual will undoubtedly become more mundane and unnecessary than you might have ever imagined. But the key is to not get frustrated. Your mortgage lenders are going to ask for every hard-copy financial statement you’ve seen, and possibly then some. Just be ready to do the work.
Eventually, you might begin wondering who goes over all of this paperwork, and how in the world do they manage to look over such quantities of documentation for every loan applicant! But the fact is, they do. They have to. Especially now, in the years immediately following our huge mortgage crisis and financial recession, mortgage lenders are not looking to take the easy way out. Particularly smaller mortgage originators can’t afford the loss, so no one is going to risk making a careless over look or letting a bad loan slip through the ranks. Hence, the rigorous underwriting guidelines and procedures you are required to abide by.
What the originating lender is looking to do is create a loan file that is perfectly consistent with the underwriting guidelines and procedures set aside by their company. The intricate complexity of these guidelines are so severe that, by the end, every aspect of your financial life will have been corroborated and double checked (sometimes even triple) to meet the standards. So, you can imagine if when you send in a summary of your bank-statement instead of all seven pages, they will call you and ask for the whole thing. Avoid the back-and-forth banter that ultimately winds everybody up and raises stress and tension: have your paperwork ready and prepared, and be willing to provide it.
The relieving news out of all of this is that if you are applying for a loan reasonable for your income and state of living and you manage to provide all the paperwork and documentation required in full to your mortgage originators, there is little stopping you from securing your loan. Banks aren’t looking to make obtaining a mortgage for a house entirely impossible: they are only taking the necessary procedures to secure themselves against bad loans and substandard underwriting procedures. In the end this will be a benefit to everyone, but for the time being it is rather a frustrating complication for all those who hoped securing a mortgage would require little busy-work.
PS – Susan Hilton is Bryan College Station, Texas’ real estate specialist in foreclosure sales and real estate agent career building so if you need help – CALL! 979-219-3970