Is this normal?

Nobody pays attention to mortgage lending for fun. No matter how much information is “out there” about the details, you won’t really notice it until it’s your turn to buy a house. Really, we aren’t trying to torture you with documentation, we’re trying to remain compliant in today’s regulatory environment. Here are the answers to recent questions about attaining a home loan.

The seller is taking an extra few days to review my purchase offer. Is this normal? When you write a purchase contract, your Realtor indicates how long the seller has to respond to your offer. Sometimes that date passes before the seller gets back to you. Technically that would put you out of contract, but yes, in my experience it’s normal.

You’re asking for a lot of really personal information when I’m applying for a loan. Is this normal? You betcha. We want to see recent tax returns, pay stubs, and bank statements. We want to see lease agreements and mortgage statements and insurance policies. We want to copy your drivers license and social security card. All this falls under the new Congressional mandates about proving that borrowers can repay the debt they incur, and the Patriot Act database rules.

I know I had to bring in my down payment, but I owe more than that at closing. Is this normal? When you first apply for a loan, you should be given a range of financing plans to choose from. Sometimes you bring in just your down payment (if there is any), and other times you may bring in your down plus closing costs. There should be no surprises at the signing table. Compare the up-front figures to your closing statement, and be sure you get a complete explanation. Remember, you ultimately control the closing by when you give escrow your final money.

I already gave you my paperwork, but you want updates on everything, and copies of what I deposited to my bank account. Is this normal? The reason you’re under such scrutiny about your bank account is twofold. The lender wants to be sure the money you bring in to closing is “your funds” so you have “skin in the game” and are less likely to default. And, we’re being watched for money laundering under several new regulations. So yes, you’ll probably be asked to account for every day of your banking activity from application to closing.

Back in the mid-2000’s you could get a home loan by fogging a mirror and having a great credit score. Since the mortgage meltdown, extreme care is being shown in documenting every last thing. Hopefully the joy you get from owning your own home will assuage the pain of the paper trail it takes to get there.

Tammy Engel is your local Mortgage Advisor and has been working for your best interest since 1990. Contact her at 661/822-7325 for purchase, refinance, and reverse mortgage.