Closing on a Home

loanHas anyone taken out a mortgage or closed on a home recently? Holy shit!

There isn’t a single day that’s gone by where I haven’t had to email or fax statements, transactions, and responses to questions from the real estate team, the mortgage team, the insurance team, and the title company. I’m convinced that you have to work a day job and be available online with access to all of your financial accounts to get this thing closed. It has been insane.

Here’s an example of one of the many items that the underwriter dug into.

Underwriter: We need you to verify payment of your rent for the past year.

Me: Sure, here’s our landlord’s home phone and cell phone number.

Underwriter: We can’t verify the information since he’s an individual and not an official rental property management company.

Me: So what do you want me to do? He’s the one who owns the building.

Underwriter: We need you to prove that you paid rent every month.

Me: Here are my checking account transactions.

Underwriter: Why do you pay your rent in cash?

Me: That’s something you should ask the landlord.

Underwriter: How come sometimes you withdrew $1720 and sometimes $1740. I thought you said your rent was $1700.

Me: The rent is $1700! Sometimes we withdrew extra cash. What does it matter to you?!

Underwriter: We’re going to need you to sign a statement saying that your rent is $1700.

As background, I work for the company that I’m getting the loan from. They know how much I get paid every two weeks, what my annual bonuses have been, my stock allotment, and how much sits in my 401k account. What does it matter what my historical rent history has been? All that matters is that I make enough to be able to pay the mortgage on my own, and that doesn’t even include my husband’s compensation. So what is the big deal. So stressful and frustrating!

For those of you wanting to buy a home and thinking that saving enough for the down payment is enough, it’s not. You need to have a large excess amount of money on reserve even after your down payment and the fees are accounted for.

Welcome to home ownership! And I thought having the winning offer was the hard part.

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Comments

  1. There have been many unspeakable horrors that I’ve had to go through. Multiple times. Made worse by TIC and condo conversion. I’m literally scarred for life.

  2. Get you loan with First Republic. Quicker and less hassle.

  3. I see this in my future soon enough and to be honest this is the part I am dreading. And next would be the monthly mortgage payment, because it really hate debt (any kind). So this is what gives me nightmares late at night.

  4. Wow!

    I remember the process three years ago. Please keep sane.

    My favorites were: How do we know that your employers are stable. I told them if SFUSD and the State of California go under, we are all in deep doodoo and the other was that I was supposedpposed to pick the key at 11:00am and couldn’t until five because their broker had a medical appointment.

  5. Ugh. When we bought our house, we qualified for the mortgage with just my husband’s salary. Yet when we were ready to settle I had resigned from my job, and it caused a whole drama about whether we could still get the mortgage. Not something an easily stressed pregnant woman wants to deal with! (that was me – I doubt you’re as easily stressed as I am)

  6. Oh what a headache! Every time A and I talk about buying we think about all our friends who have gone through the awful process and decided it’s not time right now. Damn HGTV for making it look so easy!

  7. Yes, to First Republic! They rock.
    I moved to our house when I was pregnant, and holy cow, if we never move again I’ll be happy. Luckily we have four acres so if we get restless, we can just keep adding on here. It will be a whole compound when we’re through with it.
    Good luck with everything!!

  8. My co-worker just bought a new home. He said it was ridiculous the hassle he had to go through. He owns property with another party and needed a statement from the other person – I forgot what the statement was about, but remember thinking it was lame. So the other guy sends my co-worker an email saying I don’t plan on selling the property or whatever. He prints it out and takes it to the mortgage company. The mortgage company won’t accept it because it is an email. So my co-worker says either your figure this out or I’m taking my loan somewhere else. By the end of the week he had his mortgage.

    Another acquaintance is renting out her condo and didn’t have six months of rent income, only four. The mortgage barely made it through before the deadline.

    This is so ridiculous. We go from mortgage lenders not checking anything to this extreme.

    Hopefully they get their act together soon and you can move into your new home.

  9. OMG, that just sounds like a nightmare. I’ve heard a lot of bad stories, but this just doesn’t make any sense to me. Seems to me like you’ve gone above and beyond already to prove that you have paid rent each month, but it’s good for anyone to know who is considering purchasing a home.

    Does this mean you are in the home stretch?! CONGRATULATIONS!!!!

  10. Wait, does this mean you BOUGHT A HOUSE!? Congrats!

  11. Jeeez that’s a lot of back and forth lol they’re nosey aren’t they?! I guess when you buy a house you really do sign your life away :P I’m sure its more than worth it, enjoy the process and happy hump day Catherine! -Iva

  12. Things sure have changed, Catherine. It’s almost 20 years since I bought my home but the process didn’t seem anywhere near as convoluted as the one you described. Makes me appreciate how easy I had it back then!

  13. GOOD LORD! I am exhausted just reading this! Can’t imagine how hard it is to actually live it!-Ashley

  14. Wow, my husband took care of all of that! I guess I should go thank him. I had no idea!

  15. HA, tell me about it Catherine!! We’ve done it 3 times! Wow and you work for the company…CRAZY! You think that’s bad…closing on a business(ministry) is even worse, lol!! Congrats to you guys!! Everything’s falling into place!

  16. That is crazy!! I thought refinancing was bad enough. Maybe I don’t want to downsize if I have to do all this…

  17. I come across so many incompetent people in life and I always think, how do you handle all the paperwork? Just the business of life? ;)

  18. Maybe he thought you were withdrawing late fees, whatever, it’s bananas! I guess after the market meltdown with qualifying people for the wrong amounts the loan officers are having to cover their tracks more diligently. I am sorry they are aggravating the stew out of you. I am thinking it will be worth it and these days will be distant memory very soon :) Hang in there!

  19. Found your post through SITS. The mortgage process is pretty frustrating for everyone right now. Unfortunately lending has gotten so regulated that even well qualified buyers are being put through the wringer and having every document questioned. I’ve had clients say they felt like they were being accused of doing something wrong and they clearly hadn’t. Try to remember that in a month you’ll be unpacking boxes in your new home and it will all have been worth it! Congratulations on your new home!

  20. Oh man, I used to be a banker and I don’t miss those days. I understand the need to verify income/previous credit history/etc but sometimes it goes way overboard like your situation. Congrats on home ownership, though!

  21. Oh the joys of the homeownership process! We went through this last year but we’d done a rent to own through a realtor. The guy we bought the house from had us pay via direct deposit.

    Did you not have a lease to show how much rent was?

  22. I think your ‘telling like it is’ article will help a lot of dreamy homeowners who think it’s all wine and roses once they have saved the down payment.
    Any number of things can go wrong and DO go wrong. Be prepared, stay calm and stay the course…and have a good real estate lawyer who will give you sound advice.
    Happy to have discovered your blog, Catherine. Love your writing and down to earth attitude.

  23. I want to go for a home soon. However, for the past two years I have dealt with a private owner. I transfer the money to my landlords account though. But, I am sure something will make the process dreaded.

  24. I went through this in 2011, made even worse by getting a rehab loan. It was a nightmare! The underwriter kept requesting documentation for every little deposit. I sold something on Craigslist for $200 and deposited that amount in my account. The underwriter demanded I get a statement from the buyer to prove where that $200 came from! It was such a headache. It took 4 months from my accepted offer to finally close on that damn loan. Worth it in the end, but I hope to never go through that again. It takes so much more than a down payment to get approved now. I even had to submit a doctors notice on my health to explain my maternity leave! Insanity. Now I’m dreading refinancing. Hope you close and get those keys asap! Visiting from Sits!

  25. My day job is in real estate so I’ve seen a lot of closings. It’s amazing all the hoops you have to jump through to get funding. Then after you get funding, you have to live like a saint until it closes. I’ve seen people buy furniture for their new house before they closed (they took out a store credit card to do it) only to have them told day of closing to go return it all and cancel the card immediately. They no longer qualified for the loan.

  26. Ah, the joys of working with the banking industry. And I hope you are in your new home soon.

  27. I remember this very very well. Everything thing you mentioned I went through except I never paid cash for rent…just checks out of the “rent” account because I totally knew that I would be asked that before I bought a house (lots of homebuying seminars :) ) I faxed and faxed and faxed! I thought they were going to ask me for my first born at one point! crazy!!

  28. We’ve bought a lot of homes over the years and I must say that the paperwork has gotten so much worse. Of course it is due to the mortgage crisis, but it feels like you have to prove you don’t need a mortgage in order to get a mortgage. “Dear Mr. Banker, if I could pay cash for the house I would but I need to borrow some money from you to make this happen.”
    In other ridiculousness, we had to each sign 39 pages of documents to lease our tiny one bedroom apartment in San Diego. Included in this were three pages describing how to recycle. We had to sign three pages testifying that we understood how to recycle.
    Good luck!

  29. It’s been almost 10 years since we bought our home and I don’t remember it being that big of a pain. Our “hard part” was finding a place that wasn’t under contract by the time we sat down to make an offer. But from what I’ve heard I think it’s easier to qualify if you’re active duty and using the VA loan – at least it was then. Things are changing a lot – even the security of those still activity duty is wavering.

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