Mr. NVME and I are on the perilous road to prepare for a home mortgage application. We’ve both owned homes in the past with previous spouses and now we desire a homestead of our own together.
We have quite a bit of work ahead of us and are aware how treacherous and frustrating this process can be, so I’m curious to hear how you faired. Any nuggets of wisdom or words of woe you would like to impart to us?
It probably varies based on your country/location, income, and profession, but in my experience getting a mortgage is fairly routine–all the information is generally provided in a standard form, which makes it a ton better than, say, buying a car. Compare the numbers, pick the lowest one and/or set of tradeoffs you dislike least, and sign on the dotted line.
I’d be interested to hear what makes it challenging for others. I haven’t bought a house since the middle of the housing market crash, so it’s possible things are different now.
Why is it “treacherous and frustrating”?
Mrs P and I have bought two homes together, with a mortgage both times, and it was all rather painless.
I’ve always found it a pretty straightforward process. The bank can see my fortnightly salary payments and details of my accounts. The last mortgage for which I applied was approved in about 20 minutes.
When I refinanced, this was the case for me as well.
When I got the original mortgage, it was the paperwork nightmare from hell. I think it was generally caused by the fact that the mortgage agent had an IQ somewhere around room temperature. It was a constant stream of “All I need are these documents… wait, I need this other documents… alright that’s all the documents I need… except you need to send me these differents document RIGHT NOW”. Plus there was plenty of “Oh, that’s fine, no problem… wait, actually that’s unacceptable, I need something different… oh, it’s a pain to get? I can just use the first thing anyway”. Not to mention the number of times she sent us paperwork to sign with huge numbers of typos. I mean, things like my name was misspelled, the address of the house I was looking at was wrong, my job was listed as one I quit years ago - and the worst part was, I would point them out and her response would be “Oh, it doesn’t really matter, just sign it anyway”. Um, excuse me, there is a sign section in all caps and bold saying “It’s a felony to knowlingly allow incorrect information on this report”, no way in hell am I signing that without you correcting it first.
The woman was a nightmare. I was so glad to rip her to shreds on the agent review after the mortgage closed. Then she had the audacity to call me up and complain when she found out about the numbers because they impacted your end of year bonus! I had to tell her I was upset I didn’t actually give her worse numbers, but I was being honest. I really should have called her manager and lodged a complaint (for all the good it would have done) but I just wanted that insane woman out of my life.
All in all, I’d have no problem getting another mortgage if we ever move - but I’m going to be damned careful picking the agent next time.
It was frustrating for us because we went from decent income to no income due to going back to school. That threw a spanner in the works for us, we though that being able to pay a larger than normal down payment would help, but not so much.
It was shockingly easy.
We found a direct lender, filled out the application online, went and met with one of their loan officers with our pay stubs, bank statements, and tax returns, and she took care of everything from there. She went over the numbers with us in as much detail as we could handle, and got us a prequalification letter that same day. After we’d found the house we wanted we just put her in contact with our realtor and they worked out everything amongst themselves. We didn’t see her again until closing.
I just went through the process of getting my first mortgage. I thought that I had to jump through more hoops than necessary, and I was wondering how all of the bogus no-income mortgages were generated back in the bubble days.
The house that I was buying was twice my gross salary, and I had well over the 20% down payment in my checking account. In addition, I had close to the purchase price available in an outside investment account (not an IRA). When the down payment and closing costs looked to be getting near my checking account balance, I transferred money from my investment account to my checking account. The mortgage broker wanted to see my investment account statement to make sure I wasn’t getting money as a gift from someone. This despite the fact that he had access to my checking account and could see where it was transferred from, and had the information about my investment account.
But I just shrugged and produced whatever papers that they requested. It was surprisingly easy, since everything was available on line.
The mortgage application was pretty standard. Just be ready to give them copies of your last two years’ taxes, the last 3 months of paystubs, bank statements, etc.
Buying and selling a home has become pretty tedious. Keeping your house spotless for weeks while people traipse through your house is a ton of fun! Then there’s haggling on a price. You’d think that finally agreeing on a price would be the end of it, but then you have the inspection process, which includes another set of negotiations (all of which can end the deal), and then the bank appraisal. If comps in your area don’t support the sales price, that can also end the deal.
It’s not for the feint of heart.
We just did it, and there were no problems whatsoever. We filled in an online application, then had to give three months of bank statements which I emailed. We just drove to the new town to sign the papers, and that was it. Quick and painless. I hope the closing is as easy.
Our mortgage (last spring) was much more annoying than it should have been, largely due to:
I’m pretty sure he had a checklist that he was following, and our situation had a lot of moving parts that made sense if you looked at all of them but defied the “checklist” approach. I mean, I’m in favor of tightening lending standards so we don’t have a mortgage bubble again, but at some point the two near-max credit scores, the 20% down payment, and the fact that we’re asking for a mortgage $150k less than you pre-approved us for should give you a hint that every little thing we do isn’t trying to defraud you.
Closing, on the other hand, was total cake. I want to send another thank-you note to the lawyer just thinking about it.
I live on leased land, with covenants from hell. Add in that my income varies greatly due to my addiction to tech start-ups, and you get a weird situation.
Best solution ever: I had a friend do the mortgage. Asked at church to find out who does mortgages, and got that guy to handle it all. Worked like a charm, and he was able to navigate the risk folks at the bank, etc.
You would think that a mortgage broker’s office would be able to process the same standard vanilla application packages day in and day out with speed, ease, and accuracy.
You would be wrong.
I also once had the pleasure of watching a mortgage agent screw up the collating on the copy machine and shuffle my application packet in with someone else. Then, being out of copy paper, she had to use the whole office in a mad manual un-collating to meet the last-minute deadline.
Like others, never really had much of a problem with and without a realtor. Pre-approval over the phone in a few minutes. Located a home and provided the relevant info and contract to appropriate parties. Provided copy of bank statements, W2, and tax returns.
Inspections, remediation, etc., to me are really not a part of getting a mortgage. They’re part of buying a home.
The most recent home we purchased was 3 months ago and the mortgage process was more annoying than had to be but also like others it was because the mortgage broker/agent’s IQ was somewhere around room temperature. The PROCESS itself wasn’t difficult, it was constantly having to correct or point out his mistakes in the information gathering.
Between my wife and myself, we’ve purchased 4 homes and sold 2. Other than minor hiccups with the less-than-bright last mortgage agent it has been easy sailing. knocks on wood
One interesting/annoying thing that we had to do was to write a letter to explain pretty much all deposits to our bank account that showed up the in bank statements that we had to provide.
And just to clarify, these were not raise-your-eyebrow sized deposits. One the deposits that they specifically asked about was a group of 5 checks that together totaled $130.
Whoa, better explain that! It looks like an international money laundering scheme right there! Anyone can see what we are doing with the money, buying fancy houses!