5 Personal Things Your Lender Needs to Know About You01/11/2011 Even if you’re a first time home buyer and you’ve never been through a home purchase before, you already know most of the questions your lender will ask when reviewing your mortgage application. You know your lender will want to see proof of income, your credit score, and a list of your other debts. But your lender will ask you to provide additional information, and some home buyers are caught off guard and confused when lenders request it. Five other items your lender will ask about are listed here. 1. Your ethnicity. When lenders ask about this, it’s not meant as racial profiling or discrimination. It’s just the opposite. The Home Mortgage Disclosure Act requires lenders to keep track of the ethnicity of the clients they service and provide this data to a third party for review. If a lender appears to favor one race over another, that lender may be penalized. 2. Whether or not you’re getting divorced. Sound like a personal question? Lenders are allowed to obtain this information from clients. Divorces cause major financial hardship and strain, and this can negatively affect a borrower’s ability to pay back his or her mortgage. 3. Your assets. Are you planning for retirement? Do you have any savings? Lenders will want to know what assets you’re attached to any why. This helps prove your financial solvency. 4. Whether or not you are involved in any lawsuits. Lawsuits wreak financial havoc on all parties involved. If you’re going through a lawsuit, your lender needs to know about it in order to determine whether or not to lend money to you. 5. What you plan to use the property for. In most cases, this is simple. If you’re purchasing a home, it’s likely meant as a residence. But if you’re purchasing a home as an investment property, different regulations apply. For example, you can’t qualify for an FHA mortgage if you’re buying an investment property. Your lender will need to know this. |
|
