Nosy Lender (And Sometimes Rude)

Millions of mortgage applications are made annually. Some are for homebuyers, others for homeowners refinancing. It’s all “intrusive”. During the course of a typical mortgage application, lenders obtain basic personal information and ask questions that may appear intrusive. Most of the questions are necessary for clearance.

Uncovering your social security number is required for an FHA mortgage, for example. It’s the same with HomeReadyTM mortgages. Delaying answers to certain inquiries may result in denial. Questions to anticipate and avoid are listed below.

1. “Are you married?”

Before granting your mortgage, your lender will enquire whether you are married, single, or divorced. Then what? There are numerous explanations available. Typically, divorced individuals pay or receive alimony and/or child support, and everything that affects your monthly income or expenses must be considered by the mortgage underwriter. It is possible to request your divorce decree. In jurisdictions that recognize “community property,” even if only one spouse is seeking for a government-backed mortgage, both couples’ obligations must be examined. There are now nine states with community property. Arizona is included in this list of states. Lastly, lenders want to know if you are married because each state has its own limits. Lenders want precise mortgage documents.

2. “How Old Are You?”

If a borrower is over the age of 18, they cannot be denied loans because of their age. Under the ECOA, all mortgage applicants are handled similarly. Is it because of your age that lenders are concerned? Application accuracy necessitates its use. You must be at least 18 years old in order to get a loan from a lender. Being under the age of 18 makes it more difficult to legally sign on the dotted line for an actual property loan. Following an investigation, your mortgage would be void.

3. “Are You Currently Sued?”

A sequence of questions referred to as “Declarations” follows your employment and income history. Whether you are the plaintiff or the defendant is indicated by the use of the word “involved” in a declaration. Litigation-related inflation requests, such as the following, are common when you say “yes” to the inquiry.

• The current state of your life (plaintiff or defendant)
• To what extent your policy covers you financially
• Controversial claims are evidence of this.
• The potency of your argument.

Lenders are worried that a lawsuit could lead to a financial loss, which could lead to a default on a mortgage.

4: “What race are you?”

In the Declarations section, there is a question about your race. You don’t have to answer this question, and if you don’t, it won’t change whether or not you get a mortgage. The government keeps track of whether mortgage applications from people of a certain race are approved or turned down at a higher rate than usual. Getting information about a borrower’s race helps the government spot patterns of discrimination.

5. How old is your child?

Lenders will inquire about your children’s ages. The lender doesn’t want to forget how important your children are when deciding whether or not to give you a loan. An underwriter will check your household’s monthly residual income, which is the money left over after bills are paid. This is needed for a VA loan. Families with two children need less extra money than families with five children. Having kids in the house could make it harder for you to get a mortgage. Other programs decide who can join based on how many people live in the home. One is the USDA loan that pays for the whole house.

Your Lender Cannot Ask

The Equal Credit Opportunity Act prohibits some inquiries throughout the mortgage application process. Lenders may not enquire about your health in a loan application, among other concerns. The government may find it discriminatory if a mortgage application is denied because of a person’s health. Lenders are prohibited from asking about your future plans for a family.

In the event that a borrower is plainly pregnant, lenders are not allowed to question about the pregnancy and if one or both parents would “retire” once the child is born. For the purposes of giving out a mortgage, mortgage lenders are told to assume that all working parents will keep working the same hours and for the same pay. Alternative circumstances could be considered discriminatory, and some lenders have paid substantial penalties for this in the previous decade.