Home refinance, income verification documents

Maybe someone is a mortgage broker here that can clear this up for me.

The GF is refinancing her home since rates are so damn low. Her current HELOC is 5.9%, 15yr term.

We is getting a 5 yr ARM at 3.35% with about 40% cash out. Should be fine since there is plenty of equity in the house.

Been through Wells Fargo, but their process took 6 months and rates dropped more, so we are into it with Atlantic Financial for at least 2.5 months now. We got the appraisal, and sent in all the docs, Tax Returns, Bank statements, Pay Stubs, Proof of Alimony (NJ Probation Statement, exact page from Divorce Agreement, and Direct Deposits highlighted on bank statements), etc.

First we dealt with George, mortgage broker. And he sent us all the paperwork and we sent him ours. Now we are dealing with, Stephanie, a women in the same mortgage division and she is dealing with their underwriter, another woman.

Stephanie told us we needed to send them a 3rd bank statement. No prob, I sent it, with the Alimony direct deposit highlighted.

Then she needed another tax return, no prob, I sent it. This also has proof of alimony in it.

Now she says the underwriter needs the entire Divorce Agreement. It is like 200 pages long and has a lot of personal and other information that is totally irrelevant to this mortgage app. We refused. She said it is a necessity, in its entirety, according to a State Mandate.

A Divorce Agreement only states what a person is entitled to, not what they are actually receiving. If the other party does not pay it, the receiver does not get it and must file a complaint with the court again. That is why I highlighted the bank statements to show the exact amount that is deposited every month.

No other bank required it, and I dont see how it is needed. Anyone know anything about a State Mandate requiring a complete copy of a Divorce Agreement to prove alimony income in NJ?

You are probably working with a processor/underwriter that does not want to make the loan. Maybe their problem is with the cash out part of your refinance.

Suggest you go elsewhere. Try one of the lending quote services such as Lending Tree and just do a rate and term refinance with no cash out beyond closing costs.

Now that you know what the lender will ask for, you can have all your documentation ready to go from the first day. No reason why a good loan company can’t get your refinance completely processed and committed before your 30 day rate lock expires.

The only reason I can think of that the lender will want the entire divorce agreement is to ensure that there is no language somewhere in the document that limits the alimony or provides for early termination. You get around this by not declaring your alimony as income in your loan application if you can qualify without it.

I would do a tare term refinance and try to get a HELOC for the cash-out. At the very least you will get the house refi’d. Also, why waste your time on an ARM. Fixed rates are at record lows. You will be kicking yourself when that rate starts adjusting.

She is selling the house next year or max 2 years. And there is a rate cap, but I dont see rates rising that fast anytime soon.

If she is selling that qujickly, she will never recover the cost of the refinance. In other words, after paying closing costs on the refinance, and a few mortgage payments under the new loan, chances are that your GF will have spent more money than she would have by making the mortgage payments on her current loan.

I suggest you abandon the idea of a refinance with such a short holding period in front of you.