The Ever Changing World of Mortgage Lending

My new job is an increase in pay, so why do I have to have 30 days of pay stubs in order to close my mortgage loan? 

Mortgage lenders have learned from experience that borrowers and employers can have unforeseen things come up.  To be sure the borrower will have sufficient income to repay the debt, they want to see the first 30 days of stubs to verify the payroll promised matches the amount received and that no additional deductions are going to be taken out of the borrowera™s  pay such as liens, garnishments or child support.

My current home is going to leased out, but my lender says I cana™t count the income I will be receiving to offset my current mortgage.  Is that true? 

There were some changes made to that rule about three years ago, but as long as you have at least 25% equity in your current home both FHA and Conventional will allow it to be counted.  An appraisal of your current home will be required to verify your equity position.

Why do I have to document where every deposit comes from that is not my regular payroll? My garage sale did really well and I didna™t need the extra car  anymore. 

All lenders are required to verify any extra deposits into a borrowera™s account besides payroll.  There are  new laws enacted in 2012 to avoid what the government considers to be money laundering.   If you receive a gift from a family member then the funds must be tracked as it is removed from their account and then deposited into yours.  Most loans allow gifts as long as they are from a relative.  They must also complete a gift letter form that the lender will provide stating that the     gift does not need to be repaid.  If you do happen to sell a vehicle, we can verify that you owned the auto, prove its current value and then provide a copy of the cancelled check  and bill of sale.  Lenders are now looking at all deposits  that are not payroll above $300. Lastly, ita™s best NOT to deposit garage sale money, since it can not be sourced.

My old furniture will look really bad in my new home.  I have picked out all new stuff with one of those payment free loans for a year and a half.  I am SO excited!  And my wife wanted a new car to match the exterior or our new home, the payment is only $250 more than the one we had. 

This can be a HUGE problem especially in cases of new construction where we are constantly doing credit updates.  At closing borrowers must sign a form stating that they have not increased their debts over those listed, so please do NOT change anything about your current debt load without talking in detail with your lender first.  It could be the difference between buying a new home or not. A lender must count 5% of the balance as a payment on any loan whether one is required or not.  Student loans on conventional loans always count and on FHA must be deferred for at least one year to not be counted.

Do I have to be a US Citizen to purchase a home in the USA?

Actually the rules  are very specific.  If you are a green card holder or have an acceptable visa that allows you to stay and work in the United States then you will be able to purchase a home, as long as you have two years of filed, verifiable tax returns.  If you are in the country illegally or do not have a valid social security card,then you will not be allowed to purchase a home.

My lender has asked for every possible item except my blood type and the color of my underwear, is this normal? 

Actually, most lenders dona™t care about either of those items and never request anything that is not absolutely essential to approving each loan application. Even  the questions that seem intrusive would not be required if they were not  necessary to close the loan.