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Ridiculous questions from mortgage lender

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  • Ridiculous questions from mortgage lender

    So, I made the decision to re-finance for a much better rate, but being extremely averse to any kind of administrative burdens, I am starting to regret it. It just seems insane how the process works. Specifically, they went through my bank statements and want me to account for about 15 transactions to prove they are not recurring debts, and put this in a letter! 12/15 of the payments are just me paying my credit card as soon as a balance appears. 3/5 are payments to contractors. The total mortgage is less than my annual income. Anybody else had this kind of craziness?

  • #2
    Yup, when you want to borrow someone’s else’s money they can ask you whatever questions they want. It’s painful.

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    • #3
      similar experience purchasing in 2015 at ~1.2X gross annual

      it veered quickly into the absurd.

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      • #4
        Yup, you want their money? You gotta jump through their hoops.

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        • #5
          Sounds totally normal. Worth it. One time annoying, term of loan benefit.

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          • #6
            LOL. I remember when we were refinancing and the underwriters wanted us to explain the source of a five-figure deposit to the checking account. "That's what's called a PAYCHECK." :lol: You're not special, it's their risk and they get to decide what it takes to make them comfortable taking it.

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            • #7
              I almost backed out of my refi last month.  I was so tired of all the documents requested over a 2 month period.  We opened up the books and returns and statements.  They were asking me to get a letter from my accountant explaining the difference between a distribution and profit from my practice, among other things.  We refused to do any more and after some waiting, the loan was approved.  When you look at the money we are going to save, it was worth it.

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              • #8
                Sounds like Bank of America.

                Their underwriting process is ridiculous. If their rates weren't so good, I wouldn't keep going back like a glutton for punishment!

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                • #9
                  I had to go through all of this when I refinanced my mortgage about 3 years ago. The kicker? I refinanced with the mortgage company that was servicing my mortgage already! So somehow I was ok for a mortgage where I had to pay a higher amount each month, and my house was worth even more (about 15% more at that point due to local appreciation), but paying a lower amount due to a lower interest rate was going to create a problem for them?

                  The amount of documents they wanted was ridiculous, and when I thought I’d sent everything they wanted they asked for even more stuff. Having said that, it’s been worth it. I ended up keeping my payment the same, just by adding about $400 in extra principal per month so that I could have the house paid off at the same time as my original 15 year mortgage. So conservatively I’ve paid off an extra $16,000 in principal in the last 3.5 years.

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                  • #10
                    I just went through this too! (i had a post called: “the borrower is slave to the lender” . Essentially they “own you” I had enough stocks to pay for the house with cash 3 times over, but did not want to pay taxes (ltcg, nitt, state ltcg) so applied for mortgage. They asked for last 3 years of statements, tax returns, copies of rent checks from over two years ago, w2 for years, tons of nonsense......totally retarded.
                    I said: “you see i have enough to pay cash right?” they respond: “ yes but our underwriter requires this”
                    painful. last mortgage for me (i hope)
                    Sucks that our tax code encourages borrowing but you gotta dance the dance.

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                    • #11
                      @ maxpower

                      "Having said that, it’s been worth it. I ended up keeping my payment the same, just by adding about $400 in extra principal per month so that I could have the house paid off at the same time as my original 15 year mortgage. So conservatively I’ve paid off an extra $16,000 in principal in the last 3.5 years."

                      And to think, that $16k in extra payments towards accelerating paying down an extremely low interest rate, probably tax deductible loan over the last 3.5 years could have grown and extra 20% in an S&P index fund just this year alone, which could have even further accelerate your mortgage payoff. Opportunity cost is a real thing.

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                      • #12




                        I just went through this too! (i had a post called: “the borrower is slave to the lender” . Essentially they “own you” I had enough stocks to pay for the house with cash 3 times over, but did not want to pay taxes (ltcg, nitt, state ltcg) so applied for mortgage. They asked for last 3 years of statements, tax returns, copies of rent checks from over two years ago, w2 for years, tons of nonsense……totally retarded.
                        I said: “you see i have enough to pay cash right?” they respond: “ yes but our underwriter requires this”
                        painful. last mortgage for me (i hope)
                        Sucks that our tax code encourages borrowing but you gotta dance the dance.
                        Click to expand...


                        yes, i had a similar experience. i was annoyed but jumped through the hoops.

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                        • #13




                          @ maxpower

                          “Having said that, it’s been worth it. I ended up keeping my payment the same, just by adding about $400 in extra principal per month so that I could have the house paid off at the same time as my original 15 year mortgage. So conservatively I’ve paid off an extra $16,000 in principal in the last 3.5 years.”

                          And to think, that $16k in extra payments towards accelerating paying down an extremely low interest rate, probably tax deductible loan over the last 3.5 years could have grown and extra 20% in an S&P index fund just this year alone, which could have even further accelerate your mortgage payoff. Opportunity cost is a real thing.
                          Click to expand...


                          But opportunity costs work both ways. Humans feel a loss by about twice as much as a similar gain. So it may have been worth it for @maxpower .

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                          • #14
                            "So it may have been worth it for @maxpower."

                            But it wasn't. In the real world.

                            By the numbers, aggressively paying off low interest rate long term debt is more likely than not the suboptimal financial choice. Someone's emotions or loss aversion doesn't change that fact.

                            Just pointing out that despite his 'feelings' that it was worth it, in dollar terms it wasn't.

                            Either way it's his choice. He can spend money on fine dining, travel, or the psychic benefits of paying down cheap debt. Just don't ignore the fact that those choices each cost money.

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                            • #15


                              Anybody else had this kind of craziness?
                              Click to expand...


                              I am in the same boat.

                              I am working the same lender and they gave me forms to collect information they have.  I pointed this out and they basically said too bad.

                              I realize the stupidity in this but I almost wish having a mortgage was not such a good deal.  I wish there was more incentive to pay it off.  That would be good for me and I think good for the country.  But since it is cheap leverage and it makes financial sense we have to jump through the hoops or pay the price.

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