There are several questions that loan officers will ask during the process of getting your mortgage done. Some you may think are none of their business! Some of them are rather personal but we still have to ask. There are reasons behind all of them!
The first question is "are you married"? If you think of a job interview, most of these questions can't be asked – but they can in the mortgage process. There are several reasons we need to know if you are married. One is if you are divorced, you may be paying child support or alimony and that can affect how much you can qualify for. We would need a divorce decree if you are divorced. There may be a previous home that you are still on the mortgage for, but the decree may say the other person is responsible for the payment. We also need to know how you are going to take title and being married will affect that.
Along with being married, we will ask if you have any children and how old they are. This is especially important on VA loans and USDA loans. On VA loans, we are required to have a certain amount of "residual income" left after your bills are paid, the amount can vary based on the number of people in the household. We also have to account for possible daycare costs on VA loans. On USDA loans, we can adjust the income limits based on the number of people in the household. If you receive child support and are including it in qualifying, we need to document how many more years you will be receiving child support.
How old are you? Why do we care? We need to make sure you are at least 18 years old to make sure you can sign a legal document and are old enough to be obligated on the loan. We also need to fill in the birthdate on the credit report request. We cannot discriminate against you due to age, but are required to ask.
Are you currently involved in a lawsuit? That's another question that you may wonder why we ask. It may not affect your approval but if you are found liable in a lawsuit, will you still be able to make your house payment. We will want to know what type of lawsuit and the amount of potential liability, amount of insurance to cover it and several other items to make sure you will still be able to pay your mortgage back.
One more is what is your ethnicity? You do not have to answer this, but the government wants this information. We turn this information over to the government so they can determine if lenders are charging more to certain ethnic groups. They also want to know if we are approving or denying any ethnic groups more than others.
We can't ask about your health or family planning. If a borrower is pregnant, we have to assume they are going back to work. We can't ask if either parent is going to stop working. We can't ask about your health, no matter your age – that's discrimination.
There are reasons behind the questions we do ask, it's not a job application where there are several questions that can't be asked – like marital status and number of kids. If you aren't sure why your lender is asking something, ask them why they need to know – usually there will be a reason that makes sense!
Leslie Vanderwerf, NMLS ID#335509, American Mortgage & Equity Consultants, Inc, An Equal Housing Lender, NMLS#150953 - Email - Website
