Applying For A Mortgage: Why So Much Paperwork? | Keeping Current Matters

People often ask why there is so much paperwork mandated by the bank for a mortgage loan application when buying a home today. It seems the bank needs to know absolutely everything about us and requires three seperate sources to validate each entry on the application form. 

Many buyers are being told by their friends and family that the process was a hundred times easier when they bought their home ten to twenty years ago.

There are two very good reasons that the loan process is much more difficult on today's buyer than it was years ago.

  1. The government has set new guidelines that now demand that the bank prove beyond any doubt that you are indeed capable of affording the mortgage. During the run-up in the housing market many people 'qualified' for mortgages that they could never pay back. This led to millions of families losing their homes. The government wants to make sure this can't happen again. 
  2. The banks don't want to be in the real estate business. Over the last seven years, banks were forced to take on the responsibility of liquidating millions of foreclosures and also negotiating another million plus short sales. Just like the government, they don't want to more foreclosures. For that reason, they need to double or triple check everything on that application. 

However, the housing crash that mandated that banks be extremely strict on paperwork requirements also allowed you to get a mortgage interest rate at or below 4%.

Instead of concentrating on the additional paperwork required, let's be thankful we are able to purchase homes at historically low rates.


Thanks to our friends at KCM ( for the wonderful market information!

Posted by Dil Gillani on


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