Welcome to the SuperRealtyGroupLLC.com Blog

2019-08-02 11:50:13
Why Is So Much Paperwork Required to Get a Mortgage? By Tarik Hall

 

Why Is So Much Paperwork Required to Get a Mortgage? | MyKCM

When buying a home today, why is there so much paperwork mandated by the lenders for a mortgage loan application? It seems like they need to know everything about you. Furthermore, it requires three separate sources to validate each and every entry on the application form. Many buyers are being told by friends and family that the process was a hundred times easier when they bought their home ten to twenty years ago.

There are two very good reasons that the loan process is much more onerous on today’s buyer than perhaps any other time in history.

1. The government has set new guidelines that now demand that the bank proves beyond any doubt that you are indeed capable of paying the mortgage.

During the run-up to the housing crisis, many people ‘qualified’ for mortgages that they could never pay back. This led to millions of families losing their home. The government wants to make sure this can’t happen again.

2. The banks don’t want to be in the real estate business.

Over the last several years, banks were forced to take on the responsibility of liquidating millions of foreclosures and negotiating an additional million plus short sales. Just like the government, they don’t want more foreclosures. For that reason, they have to double (maybe even triple) check everything on the application.

However, there is some good news in this situation.

The housing crash that mandated that banks be extremely strict on paperwork requirements also allowed you to get a low mortgage interest rate.

The friends and family who bought homes ten or twenty years ago experienced a simpler mortgage application process, but also paid a higher interest rate (the average 30-year fixed rate mortgage was 8.12% in the 1990s and 6.29% in the 2000s).

If you went to the bank and offered to pay 7% instead of around 4%, they would probably bend over backward to make the process much easier.

Bottom Line

Instead of concentrating on the additional paperwork required, let’s be thankful that we are able to buy a home at historically low rates.

 
Blog Archive
2019-08-08 09:54:58
Getting a Mortgage: Why SO MUCH Paperwork?

2019-08-08 09:40:25
Create Wealth: Move Up Now!!

2019-08-08 09:39:42
41% of Americans Would Prefer to Build Their Home

2019-08-08 09:36:32
Harvard: 5 Financial Reasons to Buy a Home by Tarik Hall

2019-08-08 09:35:27
FSBO Millionaires Use Real Estate Agents by Tarik Hall

2019-08-08 09:34:09
Difference Between a ‘White Lie’ and Lying by Tarik Hall

2019-08-08 09:32:36
5 Reasons to Hire a Real Estate Professional by Tarik Hall

2019-08-08 09:30:43
Homeownership’s Impact on Net Worth by Tarik Hall

2019-08-08 09:29:32
Gallup Poll: Real Estate Best Long Term Investment by Tarik Hall

2019-08-08 09:28:42
Either Way, You’re Still Paying a Mortgage by Tarik Hall

2019-08-08 09:25:58
Want to Sell Your House? Price it Right! by Tarik Hall

2019-08-08 09:25:19
Freddie Mac: Doubtful Rates Will Return to Recent Lows by Tarik Hall

2019-08-08 09:23:44
Harvard: 5 Financial Reasons to Buy a Home by Tarik Hall

2019-08-08 09:22:38
Millennials: Optimistic & Ready to Buy by Tarik Hall

2019-08-08 09:21:52
Who Says Millennials Are Not Buying Houses? by Tarik Hall

2019-08-08 09:20:13
Hispanic Millennials & Housing by Tarik Hall

2019-08-02 13:01:46
The Feeling You Get from Owning Your Home by Tarik Hall

2019-08-02 12:58:55
4 REAL Reasons Why We Buy A Home!

2019-08-02 12:57:33
3 Powerful Reasons to Buy a Home Now

2019-08-02 12:56:26
Mid-Year Housing Market Update: Three Things to Know Today by Tarik Hall

2019-08-02 12:55:32
What Experts are Saying About the Current Housing Market by Tarik Hall

2019-08-02 12:54:21
Is Renting Right for Me?

2019-08-02 12:52:36
The Cost of Waiting: Interest Rates Edition [INFOGRAPHIC] by Tarik Hall

2019-08-02 12:51:13
The Surprising Profile of the Real Estate Investor by Tarik Hall

2019-08-02 12:50:05
What a Difference a Year Makes for Sellers

Click here to see ALL articles.


Comment on this Article

Your Name:
Your Email:
Comments:
Verify:  Please enter the numbers shown to help eliminate spam.