If you ask many loan officers, although dealing with first time homebuyers is challenging, it is easier to set the right expectations on the mortgage process as they have not been through it before.  Today’s first-time homebuyer never experienced the easy mortgage process prevalent in the late 1990’s to 2007.

The most difficult group to set expectations with are move up buyers or refinance customers.  Most of them bought homes during the 1990’s to 2007 and in many cases did not have to provide anything in terms of documentation.  At the most they provided paystubs and bank statements and usually just the first page of their bank statement.   They did not have to write explanations for recent inquiries or address old credit issues.   As for the requirement for all loans to have tax transcripts pulled( what is called a form 4506), this entails the lender getting confirmation back from the IRS that the tax returns given were indeed filed and are accurate. 

You would think that most in this group would have heard about all the changes and regulations surrounding mortgages.  Many of them think the changes and increased documentation are only for those with credit challenges.  They must be made aware that it is required for everyone who is requesting a new mortgage loan.

The best thing that an experienced loan officer can do is to set the right expectation and let them know that this time around the mortgage application experience is going to be night and day from what they were used to.  Borrowers should expect a lot of questions from both the loan officer, processor and underwriter, and all these answers will need to be documented in an acceptable manner.  Because there is so much more documentation and regulation, turn times for everything from the initial underwriting review to when the closing package is sent will be longer.

Most importantly the loan officer needs to let the borrower know that none of this is personal.  Because over 90% of the mortgage loans currently offered are either insured or provided by the government, these questions and documentation are required across the board.  Patience is indeed important for the move up borrower when starting a new loan application.