When you’re refinancing or purchasing a home, there is going to be inevitable paperwork that the mortgage company is going to require. If you plan on seeking a mortgage anytime soon, please take heed to the information that follows…
Mortgage companies are under federal requirements to specifically document ATR ability-to-repay. To meet government required consumer safeguards mortgage companies are required to document every piece of your financial puzzle in accordance with creating a residential mortgage loan. As a byproduct of these safeguards what you are going to experience as a mortgage borrower in today’s environment is akin to mini-audit. It is quite possible you will be asked about things you never thought would have been examined. As a result of this unfamiliarity, one of the things that consumers always want to be aware of is understanding of how things work.
While it is important to understand how things work and why something is needed it might be more prudent to get whatever documents they might need even if you feel like they do not make sense in order to save time and then schedule a subsequent call with the lender to have a more detailed about why something is needed.
What you don’t want to do is refuse or be resistant to providing documentation until you receive a thorough and full explanation- here’s why you want to avoid that. Most mortgages have deadlines. If you’re refinancing your home you’re up against a mortgage rate lock and if you don’t meet that mortgage rate lock your escrow could be impacted negatively and it could end up costing you more money in some cases thousands of dollars. When buying a home, the same thing could be at play and you also have a purchase contract date that you have to meet as well so time becomes of the essence.
The last thing you want to do is put your money and your finances in jeopardy by not providing to the lender what’s needed or continually badgering the lender about the explanation of why something is needed- that is a dysfunctional style of communication and it doesn’t serve to benefit you or the lender in a situation like that.
Granted not every borrower and every family is uniquely the same, they’re all different and some people might find a process easier than others, but for the few people out there that are extremely focused on the net details and the mechanics-pump the brakes. By pumping the brakes, a little bit and allowing the transfer of trust to take place by getting the documentation that the lender needs to benefit you, you will have less stress, a better experience and ultimately a lower cost loan. Don’t put your finances in jeopardy or risk losing your future family home because you’re wrapped around the angle about why a letter of explanation is needed or why you need to provide all the pages of the bank statement.
Mortgage tip: the guy the down street promising you the world is also going to need the same documentation- simply put the grass is not greener on the other side.
Scott Sheldon is a local mortgage lender, with a decade of experience helping consumers purchase and refinance primary homes second homes and investment properties. Learn more at www.sonomacountymortgages.com.