X

Why is my lender asking for so much documentation?

Q: We're looking to refinance our primary home. We own rental properties and the potential lender wants to know everything about those properties, including reviewing copies of the lease agreements. These aren't part of the refinance we are seeking. It is legal or necessary for the lender to require us to disclose details (insurance coverage, tax certifications, leases and more) for properties that aren't part of our refinance transaction?

A: If you declared any income from these rental properties as a portion (or all) of the income needed to support payments on your primary home refinance, the answer is yes. The lender must have a sense that the income you are reporting from the rentals are in-line with other properties in the area, that any required debt service on those properties (mortgages, liens) is being managed and that the income stream from your rentals can be expected to continue (lease agreements, etc). Investors and secondary marketers require such verifications; without them, this portion of your income would be merely "stated" (a.k.a. undocumented), and could be easily overstated.

Ask the expert
Keith Gumbinger
Keith Gumbinger
Mortgage Expert
Vice President, HSH.com
About Keith: Mortgage market observer and analyst with 35 years experience... (more)
Submitting your question...

Question received! Check back later to see if your
question gets published.

Q: We just sold our house. When do we have to pay the IRS?
JAN 20, 2021
A:

Capital gains taxes as they apply to your principal residence can be found in IRS Publication 523.

Read More
Q: How do I find out who owns my mortgage?
MAR 15, 2021
A:

The owner of the loan is most often the "investor" -- the entity who put up the actual funds to make your mortgage happen.

Read More
Q: Does mortgage insurance assist the survivors of a deceased policy holder?
JAN 20, 2021
A:

Credit life insurance is sold to homeowners as a means to pay off the mortgage in the event of the death of the homeowner.

Read More
Add to Homescreen?
X
X
Install this web app on your phone :tap and then Add to homescreen