Warwick | Why Is There So Much Paperwork Required to Get a Mortgage?
Did you know that you are legally obligated to tell the buyer about problems that could affect your home’s value, such as foundation damage or environmental hazards like a tendency for flooding or any other major problems with your house? ….in addition, if your home was built prior to 1978, federal law requires that you take several steps to protect the homebuyer from exposure to lead-based paint.
Click here to read “Should I pay for a pre-listing inspection”
This is one of the areas where having the right representation to help you sell your home, can give you peace of mind by complying with all the rules and regulations around the home selling process in New York.
A real estate agent can help tremendously in understanding your liability and walking you through the disclosure procedures prior to putting your home on the market.
Today, I would like to address 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.
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