After the problems we have seen over the past few years in the real estate, mortgage and banking industries, it is not surprising we have seen significant changes in the loan process making it more challenging for a home-buyer to obtain a mortgage. Some of the changes borrowers see when they attempt to obtain a mortgage to buy or refinance a home include:

• Documentation –Needless to say, the “No-Doc/Low-Doc loan is a thing of the past.  Typically, your lender will ask for paycheck stubs, W-2’s and bank statements. Additional documents may be needed to prove residency, income, financial soundness or even identity. A couple of examples of additional documentation could include sourcing “large” deposits and identifying any and all credit inquires for the last 120 days.
• Updated Documentation –If it takes longer than 30 days to close your loan, your lender will likely ask you to provide updated bank statements and paycheck stubs so that all documentation is up to date and current. Just before closing, the lender will update and review your credit to make sure no new accounts were opened or significant changes were made since application; the lender will also contact your employer to make sure your employment situation and compensation have not changed since the verification was complete.
• Tax Returns Don’t Lie –In the past lenders typically did not request a copy of your tax return unless you were self employed or had “other” income outside of employment that was necessary to count to qualify for the loan. Lenders now are required to obtain a copy of your tax returns for the past two years (in some cases 3 years) directly from the IRS.
• Slow Down –Don’t wait until the last minute to apply for financing.  It is now mandatory that seven days must lapse between the time of your loan application and the closing of the loan. This is not necessarily problem for most transactions.  Most loans take considerably longer to close, but it could be an issue if you are in a time crunch and waited too long to start the process. In addition, if there are changes to the terms of your home purchase and/or loan, the closing could be delayed by three days; the lender is required to update their disclosures and give the borrower period of time to review these changes prior to closing.

With all of the new regulations and challenges now associated with the mortgage industry, there is a silver lining –interest rates are at near historic lows and homes still offer a great value.

St. Louis MORTGAGE INTEREST RATES for December 12, 2012:

• Conventional 30-Year Fixed 3.500%/ 3.777% APR
• Conventional 15-Year Fixed 3.000%/ 3.097% APR
• Conventional 7/1 ARM 2.625%/ 3.332% APR
• FHA/VA 30 Year Fixed 3.25%/4.160% APR
• Jumbo 5/1 ARM 2.625%/ 2.426% APR
• Jumbo 15 yr Fixed 3.000%/ 3.094% APR
• Jumbo 30 yr Fixed 4.625%/ 4.719% APR

*The above mortgage rates are based upon an 80% LTV, o/o single family with FICO scores of 720.

Paramount Mortgage is a locally owned Mortgage Banker celebrating our 41^st year. Great rates and programs are secondary to what is most desired in a lender relationship: Integrity, Communication and Customer Satisfaction. Be to check out our website: www.paramountmortgage.com

For more information or if you have questions on mortgage rates you may contact me by phone at my direct line, (314) 372-4319, email at rfishel@paramountmortgage.com or you can visit our company website at http://www.paramountmortgage.com.

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