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I bought my first home this month. While getting a mortgage wasn’t my first time applying for a loan, it was my first time getting a mortgage. The process looked very different from other loans I’ve gotten over the years, and a lot of things about it surprised me.
While I had lots of help along the way, it was a little bit more challenging than I expected. Here’s what surprised me most throughout the process.
Mortgages require years of income and financial verification
I had no idea how much verification getting a mortgage would require. On everything from my income to my investing accounts, I was constantly looking for statements and stubs.
I needed verification of all of my income for the past two years, and then some. Since I worked as a freelancer for a number of companies, I needed to find 1099s and W-2 tax forms from all of those gigs. That’s not including the verification I had to gather for my current job. I also needed to go back to an old employer where I worked between 2017 and 2018 for a tax form.
Mainly, it was my freelance income that complicated things. I estimate that I spent upwards of three hours gathering W-2 forms, 1099s, and paycheck stubs. Even though I try to keep those things organized, I had a lot to gather up.
It took several months to finish the whole home-buying process and get the loan
I started the process of getting a mortgage around the same time the coronavirus pandemic began. While it was inconvenient timing for sure, I also didn’t realize how long getting a mortgage would take.
I started the pre-approval process back in March. I shopped around to find the best rates and closing costs, which took a little while on its own. The applications were long, and it took me about a week to gather about five mortgage pre-approvals to compare.
By the time I finally found the house I wanted and put in an offer, it was nearing August. I was still working with the mortgage lender well through that month, and didn’t finish the closing process until September.
While navigating a very busy Ohio housing market during the pandemic complicated things, it also just took a long time to get it all done.
I thought the process would be like getting my student loans, but they were vastly different
Throughout this process, I kept thinking back to my first time borrowing money: getting student loans.
When I got my first student loan, I was 17, had no real income, and no idea how much I’d eventually earn. My mom and I sat down at the kitchen table to take out my first federal student loan and in an hour, I had money to cover the cost of tuition after scholarships at my private college. By the time I graduated at 20, I had a debt similar to that of a modest Midwestern mortgage. But, unlike …read more
Source:: Business Insider