Unless you are rich or have huge equity in your home it is an exercise in frustration to obtain a mortgage or refinance one these days. TV ads make it all seem so easy. Just apply and you will lower your interest rate without incurring closing costs or other expenses. Well, you won't get nailed for closing costs and so on that you can see. Believe me, banks and other lending institutions all want their pound of flesh and will get it one way or another.
Take my experiences for example. A year ago I tried to refinance my Palm Springs home through a lending agency in Newport Beach, California. They promised an easy process and no closing costs. What I got was an individual who couldn't sort out his navel from a hole in the ground. Of course I didn't make it easy for them but had someone somewhere had some common sense it could have been much simpler. I know it's not all the fault of the lending agencies. Some of it rests with the Federal Government and their paranoia over terrorism since 9/11/01. Part of it has to do with the fact that I was in the employ of a church with additional incomes generated from Social (In)Security and my teaching. But still, did everyone have to be a scarecrow from Oz? Remember him? He was looking for a brain!
No one at that mortgage company could figure out why I got checks twice a month from Camelback Christian Church but couldn't give them a copy of my pay stub. Duh! Camelback used normal checks and their payroll checks had no pay stub since it was done by hand. Then, they couldn't figure out that part of my income was non-taxable because it was housing allowance. One of the most frustrating questions floated around my teaching income. I don't want to give you the exact figures, but let's just say I was paid $7,000 for a semester. Not knowing how we wanted to use the money I deposited in my checking account. Then a day or so later I moved a large portion of that money to savings. The lenders couldn't figure out where the $14,000 came from! No matter how often I explained it or walked them through it they couldn't get it. They also had a problem with why I was depositing $2,400 twice a month but my income showing on my tax forms was $24,000 less than what it looked like I earned. Well, dummy, it was housing allowance just like those in the military receive. For several months we went back and forth until I gave up and went back the bank that held my current mortgage and refinance through them. I paid closing costs but saved gobs of hassle.
Now I've retired and have sold the Palm Springs house and am buying a smaller home back in Sun City, Arizona. I had salary and housing from Camelback through the end of June and a nice gift check from the church to say goodbye. The banker in Arizona said, "No problem!" All my retirement income had not kicked in but still, "No problem!" As usual, I had to supply the bank with two months of my bank statements. Almost immediately the questions came, "Where did all that money you deposited come from in May and June?" "It was my salary and housing allowance," I affirmed. "Prove it!" they said. I'm sitting here asking, "Why? I won't be receiving those checks any more and why should they care?" I don't show any weapons or strange chemical purchases in my spending habits. The amounts were less than $10,000. I've only seen that much money at one time when I sold a house or got money I'd saved for a car. It'll all get worked out but I find it frustrating and those who demand it (the Federal government) somewhat paranoid! It is just stressful for an old guy, a good citizen who has voted in every election since Barry Goldwater ran for president, and who pays his taxes on time every year.
Surely someone somewhere has gone way beyond the Scarecrow of the Wizard of Oz! Surely it should be obvious that with just a little look it would become obvious I'm not loyal to some Imam somewhere and have no intention of blowing anything up. Okay, so I'm conservative and Christian. Is that enough to warrant the pressure? Evidently the IRS thinks so as does someone in the White House. Surely someone somewhere has a little common sense. Nope! No common sense much of anywhere in the good ol' USA anymore. We are all politically correct, timid, and concerned that someone will think badly of us.
The demands of the bankers is due to the paranoia created by the collapse of the housing industry a few years ago. We have Barney Frank and his cohorts who pushed easy money at people who couldn't wisely spend ten cents to thank for that. For all of the paranoia around terrorism we have -- and I really hate to say this -- George Bush the younger to thank for that. Well, maybe not him...but his administration to be sure.
By the way, the safest place on earth is solitary confinement in one of our prisons. If you want absolute safety why not apply for admittance? Oh, and think of it. You'll get cable-TV, 3 squares a day, and maid service.