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Personal Finances / Buying or Selling a Home


Subject:  Re: Mortgage Date:  9/29/2019  6:36 PM
Author:  Rayvt Number:  129259 of 129289

They look at the documented income on your last 2 tax returns to qualify you for a mortgage.

They didn't even request to see any tax return. That surprised me. Last time they wanted to see all ~30 pages of the return.

I seem to recall that you have SS and are pulling money from your retirement accounts, in addition to getting dividends, interest and capital gains from taxable accounts.

I was all prepared, told the loan officer that my scheduled monthly draw from the retirement accounts was $x000 but I rarely took that much, only took as much as I needed for the current bills. She didn't care, and they never asked anything about it again. I was prepared to show them whatever they wanted.....but they never asked.

some lenders like to see at least 2 deposits into your account, so just showing one uncashed check wouldn't work.

This is the 6th time we've refinanced this house, in addition to the original purchase mortgage. Every time it is different. Every time they ask for different things, and sometimes they don't care about something they were insistent about on a previous time, and sometimes vice-versa.

I still don't quite understand all the jobs. There is the loan officer, who is the original contact and the one who takes all your numbers. Then the loan processor who -- I guess -- collects & validates all your financial paperwork. And once the loan processor come in, the loan officer doesn't want to talk to you anymore. Then there is the "underwriter", who you don't get to talk to, who evidently tells the processor what if any additional paperwork they want to see.

I think it is this underwriter who is the one that gets picky about exactly what documentation & paperwork they want to see. It always feels like an ad hoc thing, because different ones get picky about different things.

for a qualifying mortgage, up to 42% of your monthly income can be used for the mortgage

Whoa! Back in the day the ratios were like 28% and 36%. Now you're saying the front-end ratio is 42%?? Or is that the total DTI?

If the income documented on your tax returns hadn't been enough to qualify you for the mortgage, then you may well have needed to set up an additional withdrawal from your retirement accounts.

Yeah, the first time, before I knew the magic words, I argued that this was silly, since I could start the necessary withdrawals now and stop them after the loan closed. They said, "Yes, I agree it is silly and you can certainly do that....but this is the requirement." And it had to be a pre-directed automatic fixed withdrawal, not a manual draw of an arbitrary amount. Silly, but there it was.
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