My Journey to Get a Mortgage Loan — The Beginning

JPMorgan Chase, the nation’s biggest bank, announced quarterly financial results this morning. It missed on both revenue and net income. Especially, the revenue at the bank’s mortgage unit was $1.6 billion, down $1.1 billion from the same period a year earlier. Huge drop by all means.

Its stock price dropped more than 3%.

Given my experience in the past couple of weeks in getting a mortgage, I am surprised at how difficult it is nowadays for people to get loans from lenders. In my journey, I flirted with the idea of getting a loan from JPMorgan Chase, and dropped the idea in a couple of hours.

It has been a noteworthy experience and I am going to share it with my readers.

At the beginning of March, 2014, my wife and I entered a contract on a house in Irving, TX. We are moving about 15 miles closer to my wife’s work place. The distance translates into about 30 minutes of commute time each way. Think about CO2 she is producing less than otherwise over the next 20-30 years.

My wife works for a company and draws a steady salary and she have worked there for almost 10 years now. Through her employment, we also have medical insurance. Every entrepreneur should have a hard working wife like mine.

I have been self-employed for the past 7 years and have paid myself around $100,000 in salary during the past two years with year-over-year growth. I disclose these numbers to illustrate my point, not to bragging about myself. Plus, it is not much, is it?

We were confident that we should be able to get a mortgage easily. We were wrong.

The closing date was set on April 8, 2014, some 40 days away, leaving ample of time for us to arrange the financing. We were wrong.

We are getting our loan from a mortgage broker. As a starter, aside from filling out and the standard forms that they provided, these are the documents he required:

1. Federal Tax Return for both 2012 and 2013 (2)
2. W2 forms for me and my wife for both 2012 and 2013 (10)
3. K-1’s for two LLC companies that I own shares in for both 2012 and 2013 (4)
4. Property tax statements and insurance premium statements for the three rental homes that I own (6).
5. Bank statements for the past two months that shows we have enough cash to cover the down payment of 25% of the selling price (2).

So that is 24 documents in total. This is indeed just the beginning.

After receiving our application material, the broker ran our credit report. It has been awhile since last time we saw one of these. My scores from the three Credit Bureaus were around 735 and my wife’s were 780. Somehow the Credit Bureaus think my wife is more credit-worthy than me. Fine with me.

I am the primary borrower so my scores matter more. 735 is still a good FICO score. So It is still better than more than half of the country’s consumers.

So we should have no problem in getting a loan to buy a dream house, right? Wrong!

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