Sell My House in MD | Why Is There So Much Paperwork Required to Get a Mortgage?

 

Most real estate brokers and agents don’t really have all the tools needed to provide 100% selling services to sellers that need to sell their houses  quick, for cash and at a fair price. 

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Today, I would like to talk to you about  Why Is There So Much Paperwork Required to Get a Mortgage?

 

Why is there so much paperwork mandated by the lenders for a mortgage loan application when buying a home today? It seems that they need to know everything about you and 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 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 seven years, banks were forced to take on the responsibility of liquidating millions of foreclosures and also negotiating another million plus short sales. Just like the government, they don’t want more foreclosures. For that reason, they need to double (maybe even triple) check everything on the application.

 

However, there is some good news in the situation. 

The housing crash that mandated that banks be extremely strict on paperwork requirements also allowed you to get a mortgage interest rate around 4%. 

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.

 

Source.. KCM Fernando Herboso Blog

 

To show my commitment to my clients, I will utilize the latest technology, know-how and information allowing me to bring you the best and highest offer for your house. 

To connect with me directly, 

Please call Fernando at 301-246-0001

Or via email:  Fernando@ReallyNiceHomes.com 

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