The Underwriter
I have to interrupt your regularly scheduled programming to talk about underwriting. I had totally planned to talk about the kitchen next, but for some reason we are being stalked by our mortgage underwriter and it cannot be ignored. Well maybe not directly stalked but our mortgage broker guy keeps making requests for info from us on behalf of the underwriter, and I can't keep a train of DIY thought going without him butting in asking about what I'm wearing and what I ate for lunch today. Not really, but it sure feels like it. Hey, the underwriter needs this. The underwriter needs that. There are people I've dated (way back in the dark ages) who know far less about me than this underwriter guy does now. He is one nosy dude.
We've gotten plenty of mortgages before. Let me see, we've bought 6 houses over the 20+ years we've been together and done 5 mortgages before. Throw a mortgage refinance in there too. Like I've mentioned before, my dad was a real estate broker - and I even worked in his office for about a year - so we got this. When we made our official offer, I contacted the mortgage guy who we used to buy our current house. He had me fill out a mortgage application, and I got ready to start providing the documents. W-2s, pay stubs, bank account statements, etc. Ok, so you need a copy of my current mortgage statement - yeah, that makes sense since we will carry that mortgage for a few more months. Oh, you need my entire tax return from last year - that's new. And my property tax bill? And my HOA dues statement? Scan my drivers license? Wow. When will I need to turn over my first born child?
That wasn't the end of it, y'all. We had to send a letter stating that our only credit inquiry in the last 30 days was from the mortgage lender. Next pay stub, please. Now we need statements from your accounts at your financial advisor. Wait, there were large deposits here and here. Where did those come from? We need the statements to show that too. Now we need a letter stating your intentions to sell your current house in the spring. Then alert, ALERT there's been a credit inquiry in the last 30 days. WHO, WHAT, WHERE? We had to write a letter stating the origin of that. (BTW, it was to rent the space for the new brewery. A whole other blog topic, I'm telling ya.)
This last request was where it really started to feel intrusive. Like "they're watching you" kind of stuff. Are they monitoring my email too?! So I decided to do some more reading about underwriting. Apparently, there were some changes to the rules of underwriting in 2014, and it's a way more rigorous process. Well, I guess that's a good thing. Have you seen The Big Short? If not, go watch it now. I'll wait.
The first part of underwriting, the verification of credit, seems to be where they want to get all up in your bid-ness. I'm sure this varies, but they do far more verification than they used to. They're supposed to call your employer to verify your employment and income, they scour your credit history and make you explain anything that raises a red flag with them. According to the new rules, in order to have what's known as a "qualified mortgage" (QM) it needs to have lower upfront costs, safer features, shorter terms, and set payments. Great, didn't this already exist as a conventional mortgage loan? Anyway, it basically means nothing crazy like balloon payments, interest only payments, crazy points, terms over 30 years. To qualify for a QM, they make sure that your monthly debt including the new mortgage isn't more than 43% of your pre-tax income. IMO, these are all Very Good Things that will help keep the events of 2008 from happening again. But it doesn't stop it from feeling like they're getting a little too personal sometimes. I almost feel like we need to take our underwriter out on a dinner date once this is all over.
It's been a giant PITA, which was compounded by the fact that the new house purchase coincided with the oldest child moving to college and the husband starting a new brewery business. That's why I needed this blog - to laugh about the whole thing. The alternative wouldn't be pretty. :)
We've gotten plenty of mortgages before. Let me see, we've bought 6 houses over the 20+ years we've been together and done 5 mortgages before. Throw a mortgage refinance in there too. Like I've mentioned before, my dad was a real estate broker - and I even worked in his office for about a year - so we got this. When we made our official offer, I contacted the mortgage guy who we used to buy our current house. He had me fill out a mortgage application, and I got ready to start providing the documents. W-2s, pay stubs, bank account statements, etc. Ok, so you need a copy of my current mortgage statement - yeah, that makes sense since we will carry that mortgage for a few more months. Oh, you need my entire tax return from last year - that's new. And my property tax bill? And my HOA dues statement? Scan my drivers license? Wow. When will I need to turn over my first born child?
That wasn't the end of it, y'all. We had to send a letter stating that our only credit inquiry in the last 30 days was from the mortgage lender. Next pay stub, please. Now we need statements from your accounts at your financial advisor. Wait, there were large deposits here and here. Where did those come from? We need the statements to show that too. Now we need a letter stating your intentions to sell your current house in the spring. Then alert, ALERT there's been a credit inquiry in the last 30 days. WHO, WHAT, WHERE? We had to write a letter stating the origin of that. (BTW, it was to rent the space for the new brewery. A whole other blog topic, I'm telling ya.)
This last request was where it really started to feel intrusive. Like "they're watching you" kind of stuff. Are they monitoring my email too?! So I decided to do some more reading about underwriting. Apparently, there were some changes to the rules of underwriting in 2014, and it's a way more rigorous process. Well, I guess that's a good thing. Have you seen The Big Short? If not, go watch it now. I'll wait.
The first part of underwriting, the verification of credit, seems to be where they want to get all up in your bid-ness. I'm sure this varies, but they do far more verification than they used to. They're supposed to call your employer to verify your employment and income, they scour your credit history and make you explain anything that raises a red flag with them. According to the new rules, in order to have what's known as a "qualified mortgage" (QM) it needs to have lower upfront costs, safer features, shorter terms, and set payments. Great, didn't this already exist as a conventional mortgage loan? Anyway, it basically means nothing crazy like balloon payments, interest only payments, crazy points, terms over 30 years. To qualify for a QM, they make sure that your monthly debt including the new mortgage isn't more than 43% of your pre-tax income. IMO, these are all Very Good Things that will help keep the events of 2008 from happening again. But it doesn't stop it from feeling like they're getting a little too personal sometimes. I almost feel like we need to take our underwriter out on a dinner date once this is all over.
It's been a giant PITA, which was compounded by the fact that the new house purchase coincided with the oldest child moving to college and the husband starting a new brewery business. That's why I needed this blog - to laugh about the whole thing. The alternative wouldn't be pretty. :)
The older I get, the less nice I am to people who want to get all up in my bidness....
ReplyDeleteWhat do you mean, "the older I get"? You were always like that. :)
ReplyDeleteWhat do you mean, "the older I get"? You were always like that. :)
ReplyDeleteAMEN, Sister!!!
ReplyDelete(But really, he is a LOT LESS NICE.)