People applying for Newfoundland mortgages are asked to verify their employment details, prove their income, and offer permission to get their tax return reviewed. However, often it’s seen that lenders ask questions that appear to be out of the context to borrowers. Things like accounting for every dollar in your account may seem like stretching things a bit. Lenders on their part are likely to keep a record of everything in order to assure underwriters that the borrower will pay the loan back.
As a borrower, you should therefore be ready to face the following questions from Newfoundland mortgage lenders.
Employment history: Majority of the lenders stress on a two year history of employment and need to be provided with a contact where they can verify the information. Some lenders may also go ahead and ask for educational certificates to check the background.
Income: Usually a couple of recent pay stubs are necessary, but some of them might even want to see the tax returns, especially in case of individuals who are self employed. If there are discrepancies in the income statement, these may lead to additional questions. A decline in your compensation may also require you to answer more questions than otherwise needed.
Assets: Lenders might want to know more about your assets to make sure that you have not taken a loan to make the down payment. If the borrower is taking help for the home purchase, then the gift letters need to be produced as evidence.
Debts: The borrower’s debts are indicated on the credit report and are calculated as part of the debt to income ratio. Ideally, borrowers should carefully review their credit history before applying for a mortgage as any debts which you think you have cleared may require proof or a disputed debt may need to be taken care of.
Credit history: Credit history constitutes an important part of the loan application. Lenders assess the loan application to check for any inconsistency. If there are quite a few credit inquiries, then lenders may as well ask questions regarding other loans or credit cards.
Apart from the usual questions pertaining to a loan application, do not be surprised if the lender asks you about any pending lawsuits that you might have, ethnicity or divorce. In other words, every borrower should be prepared to answer a wide range of questions. In case you feel that the questions asked are out of bounds, then you are always free to switch over to a new lender. In fact, mortgage brokers in Newfoundland can give you a fair idea of the kind of questions to expect.