Wednesday, July 25, 2012

Steps to get a California Mortgage Include Number Eight of Ten:  Paperwork Rules.

Because the details of a loan transaction matter so much, be prepared to provide proof of everything.   The vast majority of loans are sold to Fannie Mae or Freddie Mac.  Their requirements for buying a loan (a Conforming loan means it conforms to Fannie’s and Freddie’s guidelines) are stringent, which puts pressure on the bank to make sure everything is exact and correct.   You will be asked for tax returns, pay stubs, rent receipts, banking information, business financial statements, employment verification, and proving many types of assets.

In a very real way, loans have become impersonal.  The days of a friendly banker giving you the benefit of doubt or bending a rule because you’re a good customer are no more.  In this climate, lenders fear that if they miss a detail, the loan could be unsalable, so they’re thinking down the road.  An issue that could be explained by a borrower personally will not be communicated as the loan moves into the secondary market.  Asking for documentation now assures lenders of recouping their investment later. 

You can cut down on the time required to close a loan by having these types of documents organized well in advance. 

If you have missed the first seven of these ten steps to getting a great and low cost mortgage, just click and scroll down.



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