Years ago, when our parents and grandparents went to the local bank to get a loan, they would meet with a banker who they likely knew. The banker would consider many factors, including their personal relationship, in determining whether to approve the loan.
This is not the case today. Today, it is about the saleability of the loan.
The lender typically sells the loan after it is closed. The lender is focused on making sure the file contains the appropriate documentation to be sold. The buyers of these loans, investors in the secondary market, provide the specific guidelines as to what the loan package must contain in order to be purchased. The process becomes a documentation gathering and explanation procedure to ensure the sale of the loan. I liken it to “square peg square hole” – all of the pegs must fit all of the holes for the loan to be saleable, and therefore “approved.”
So, if you are getting close to closing, and the lender asks for a document they hadn’t previously considered, take this as a good sign, they are working towards packaging the loan to sell it, which means loan approval to you and $$$$ towards your home.
If you receive a funky request for documentation, and you’re unsure whether you should send it into the lender, contact us and we can go over it with you and try to explain why it is, or is not, needed.
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