What do you do if your friendly lender, invites you to sit down and apply for a mortgage, the very politely hurries you out the door empty-handed leaving you puzzled as they go and wash their hands and wipe off the chairs you were just sitting in! Well that is a bit extreme and you can read a previous Blog I wrote some time back regarding my dislike for credit scores, at: Caution Drama Queen Just Ahead
Now please don’t take the shove out the door personal. The Mortgage Bankers Association, or MBA, estimates that about half of all new mortgage loan applicants are being turned down. Though refinancing approvals remained static, the acceptance rate on mortgage applications suffered a 10% point drop, from 63% in the first half of 2007 to 53% in the first half of last year. Now further tightening of credit standards means at least half of mortgage-seeking consumers can’t squeeze through to acceptance, says the MBA.
Instead of wondering if you forgot to turn in your last video you rented, thus causing this problem; insant anger, denial or any of the usual emotions associated with rejection, the consumer who is intent on buying or refinancing should adopt a pragmatic approach, since clear-eyed determination may eventually land them a loan and they have NO choice.. so here’s how.
First start with getting to the bottom of the real reason. If you’ve submitted a formal application, federal law dictates that you’re entitled to a formal rejection. ( You will be surprised how many firms fail to follow through with this compliance item Robin Weirich ) Expect an “adverse action” notice, spelling out the reasons for turning you down, such as you forgot to turn in the video on time.. ( kidding, well sort of! Robin Weirich )
Nine Tips for Mortgages in 2009 / How to Read Your Credit Report / Mortgage Basics / Get Your Free Credit Report
If your home’s CURRENT value isn’t the issue, then may be your personal credentials, such as your creditworthiness, work history or debt load. When credit is the issue ( better toss in the towel until the industry wide shake up finally calms down and lenders regain confidence!! Robin Weirich ), an adverse-action notice is required, naming the credit reporting agency that provided the data on which the lender based its decision, according to Federal Trade Commission rules. You’re also entitled to a free credit report; see the FTC Web site for more information.
Given the odds of an approval, a lender may not require you to pay a few hundred dollars to submit a formal application, which includes the cost of a professional appraisal on the property. Instead, they may pull a credit score, letting you what you’re likely eligible for. ( If you work with a seasoned Loan Broker, you should be able to determine all of this “without” incurring any cost other than if you run your credit report through their agency and or if you and your Loan Broker is having a tough time coming up with Value, in which case your Loan Broker, should be able to communicate with a reputable appraiser to determine value before a site visit, this will keep your cost at a minimum. You should always question up front fees. Robin Weirich )
Fixing the problem is next! Qualifying for a mortgage isn’t a black & white issue, not that is ever had been. Instead, a different loan, with varying or adjustable rates may be available. If you don’t qualify at 5.5 percent, you may be able to qualify for a loan at 6 percent or 6.5 percent or even greater depending on your credit history. However, for many borrowers, refinancing, a need a certain rate to reach the monthly payment is the only way for a loan to make sense for them. You shoulld note that not only are rates higher for risky loans, but there are now upfront “point” charges dictated by Fannie Mae and Freddie Mac, the two big mortgage guarantors currently under government control. To learn more read: Look at other options… I want to hear your opinion on Credit and Credit Scores! I am not a fan of the credit scoring system having worked in the financial industry long before scores were ever adopted. Please note that one sure way to help avoid these types of issues in advance is to work both with an experienced Loan Broker and Real Estate Agent.
My next Blog will be on the “Media and role it played in the financial / bank melt down and I need your input.” Robin Weirich
Robin Weirich CBW
Now please don’t take the shove out the door personal. The Mortgage Bankers Association, or MBA, estimates that about half of all new mortgage loan applicants are being turned down. Though refinancing approvals remained static, the acceptance rate on mortgage applications suffered a 10% point drop, from 63% in the first half of 2007 to 53% in the first half of last year. Now further tightening of credit standards means at least half of mortgage-seeking consumers can’t squeeze through to acceptance, says the MBA.
Instead of wondering if you forgot to turn in your last video you rented, thus causing this problem; insant anger, denial or any of the usual emotions associated with rejection, the consumer who is intent on buying or refinancing should adopt a pragmatic approach, since clear-eyed determination may eventually land them a loan and they have NO choice.. so here’s how.
First start with getting to the bottom of the real reason. If you’ve submitted a formal application, federal law dictates that you’re entitled to a formal rejection. ( You will be surprised how many firms fail to follow through with this compliance item Robin Weirich ) Expect an “adverse action” notice, spelling out the reasons for turning you down, such as you forgot to turn in the video on time.. ( kidding, well sort of! Robin Weirich )
Nine Tips for Mortgages in 2009 / How to Read Your Credit Report / Mortgage Basics / Get Your Free Credit Report
If your home’s CURRENT value isn’t the issue, then may be your personal credentials, such as your creditworthiness, work history or debt load. When credit is the issue ( better toss in the towel until the industry wide shake up finally calms down and lenders regain confidence!! Robin Weirich ), an adverse-action notice is required, naming the credit reporting agency that provided the data on which the lender based its decision, according to Federal Trade Commission rules. You’re also entitled to a free credit report; see the FTC Web site for more information.
Given the odds of an approval, a lender may not require you to pay a few hundred dollars to submit a formal application, which includes the cost of a professional appraisal on the property. Instead, they may pull a credit score, letting you what you’re likely eligible for. ( If you work with a seasoned Loan Broker, you should be able to determine all of this “without” incurring any cost other than if you run your credit report through their agency and or if you and your Loan Broker is having a tough time coming up with Value, in which case your Loan Broker, should be able to communicate with a reputable appraiser to determine value before a site visit, this will keep your cost at a minimum. You should always question up front fees. Robin Weirich )
Fixing the problem is next! Qualifying for a mortgage isn’t a black & white issue, not that is ever had been. Instead, a different loan, with varying or adjustable rates may be available. If you don’t qualify at 5.5 percent, you may be able to qualify for a loan at 6 percent or 6.5 percent or even greater depending on your credit history. However, for many borrowers, refinancing, a need a certain rate to reach the monthly payment is the only way for a loan to make sense for them. You shoulld note that not only are rates higher for risky loans, but there are now upfront “point” charges dictated by Fannie Mae and Freddie Mac, the two big mortgage guarantors currently under government control. To learn more read: Look at other options… I want to hear your opinion on Credit and Credit Scores! I am not a fan of the credit scoring system having worked in the financial industry long before scores were ever adopted. Please note that one sure way to help avoid these types of issues in advance is to work both with an experienced Loan Broker and Real Estate Agent.
My next Blog will be on the “Media and role it played in the financial / bank melt down and I need your input.” Robin Weirich
Robin Weirich CBW
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