When it comes time to apply for a mortgage in 2014, you might be surprised at how much documentation you’ll need.
J.D. Crowe, president of Southeast Mortgage in Lawrenceville, Ga., says most of the documentation should be familiar to you if you have applied for a mortgage loan in the last five years. If you’re new to the mortgage market this year, he says, this is all new.
The new qualified-mortgage rules that took effect on Jan. 10 make this paperwork even more important. To meet the rules, lenders will be even more diligent in collecting the paperwork that proves that you can afford your monthly mortgage payments. David Reiss, professor of law at Brooklyn Law School in Brooklyn, N.Y., says that while the documentation requirements under the rules might come as a shock to those who haven’t applied for a mortgage since 2008, they are common-sense requirements, for the most part.
“These are really common-sense rules,” Reiss says. “The new rules say that mortgage lenders are no longer allowed to throw out the common-sense standards of lending money during boom times, when they might be tempted to overlook long-term financial goals for quick profits. If the rules help that happen, they’ll be a good thing.”