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Getting Frisked for a Loan
by Patricia Draznin

With interest rates down, maybe you’re one of millions of Americans tackling a homeowner’s loan application, a document of mythic proportion whose instructions should read: WARNING: APPLICATION MAY APPEAR SMALLER THAN ACTUAL SIZE. DO NOT ATTEMPT TO FILL THIS OUT ALONE.

That’s why when my husband and I applied for a loan, our mortgage broker Mitch moved in for the night. We spent the evening signing our names, as we were prompted, one page at a time. By 11:30, my husband and I were slumped over our dining room table, the weave of the place mats etched into our faces, while Mitch was still energetically pushing papers under our noses.

“Sign here. And here. And here.”

When Mitch forklifted the paperwork back into his semi at dawn, we thought there was nothing to do but wait for FedEx to deliver the money through our mail slot. But no. Later that morning came a phone call. 

“We need your W-2’s from the past three years,” said Mitch.

“Were we supposed to save those?” I said.

“And your 4th quarter investment statements,” he said.

“Okay,” I said, wondering if frequent flyer miles counted as investments.

“And your last savings account statement.”

“I’ll check,” I said, wondering if three cards of Subway stamps were considered assets.

“And the exact amount of cash in your wallet.”

I hung up before he could ask for my dental records and a urine sample.

Eventually we found ourselves at The Closing where we—The Buyer—met with The Seller and The Lawyer over hundreds of pages of fine print, including several of our own checks, to “sign here, and here, and here.” This time we got to keep a copy of the document, along with a complimentary file cabinet. And when all the signing was over we became the proud owners of some serious monthly payments, along with some valuable homeowners’ lessons that I’d like to share with you today:

• A total stranger—or worse, someone you know—can run a credit check showing every place you’ve ever lived, worked, or ordered latté.
• There’s no reason to worry about interest rates when the closing fees will probably kill you.
• On a 30-year fixed mortgage, the markup is 200%, which is like buying one house for the price of three. And I’m the person who shops at Target to save 11 cents on dental floss.

If you’re buying your first home, don’t let this scare you. Before you know it you’ll be lining up contractors for all your creative improvements that will cost 37% above the estimates. But you won’t think about this once you start working your way down the list of repairs you uncovered after you moved in. And you’ll get over that once you resort to vegetable gardening to save money for home upkeep and discover that the $900 a year you were spending on produce now comes to $4,765 in garden maintenance.

Join me next time when we’ll discuss the merits of renting.

Copyright 2003 Patricia Draznin

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