I've had a number of conversations recently with some would be first time home buyers. Newbie home buyers are fun. I love being able to teach them and guide them through the lending process.
What's been interesting lately is how much some of these newbies "think" they know of the whole "obtaining a mortgage" process. I've actually had a few folks challenge me...ok, no really....ARGUING with me in terms of what they would need to provide, documentation wise, during the application process.
Recently, a fella in his mid thirties responded to some of my requests with "well, that's not how my folks did it when they bought a house". Based on our conversation, I believe his folks may have executed a Stated Income, or No-Doc loan. This young gentleman who I spoke with was really annoyed that I would need tax returns from him. He's in the same line of work that his father is in, and well, he just "assumed" that he could get the same type of financing.
I really feel kind of bad and feel like I'm giving them all this "bad" news, with regard to what I'm requesting. While I'm sure his folks had the best of intentions for their son, obviously they aren't aware that number one, those "stated" deals don't exist, and that two, even fully documented transactions have become much more paper intensive. Unfortunately, they set some expectations in their son's mind...expectations that can't be met.
This young fella left my office I believe a bit annoyed. He just didn't like what I had to tell him and insisted "he knew better".
Parents always want what's best for their kids but I make a plea to well intentioned parents out there.....Teach your kids what you know and have experience with.
Let the experts handle the other stuff.
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