If you are reading this chances are you recently heard some bad news. Financing falling through at the last minute is something no one wants to go through.
The question in your mind might be:
- How can I be pre-approved and then denied?
One of three things most likely happened
- Surprise Negative Credit Item – Most lenders do a soft pull of your credit a few days before closing to make sure there is nothing new on your credit. If a collection, late payment, or judgement shows up then they have to re-analyze your credit. We helped a client that came over to us after he was turned done because a new collection showed up on his credit. The lender had an internal rule that said “no collections in the last 12 months.”
- You Bought Something New – If you buy a new car and it adds $350 dollars in additional payments your making, now your debt to income changes. A client that we were able to help in a home told us of his experience. The lender called him and said “Your DTI is now 46% and my underwriter will only allow me to go up to 43%. Sorry, we can’t do your loan.” This is when the client thought that meant he couldn’t get a mortgage loan anywhere which was not the case.
- Lender’s Internal Rules Change – Most lenders have internal rules on the minimum credit score they will accept. If a lender changes their minimum from 600 to 620 you may have an issue if your credit score is 618. It is unfair to say the least when a buyer no longer qualifies because one of these internal rule changes.
One of the worst experiences one can go through is when your mortgage loan is denied. So what do you do? There is no one size fits all answer but there is hope.
The hope coming from the fact that not all lenders are created equal. Just because one lender turns you down doesn’t mean they all will.
Guide to finding a lender who can truly help you:
- First – Tell the lender about your recent denial on a home loan.
- Second -Ask the lender if they have helped anyone with a similar issue into a home.
- Third (Most Important)– Talk to at least 3 lenders. After 3 phone calls you will know who is the experienced loan officer and who is not.
We only ask that you make Village Mortgage on of those 3 phone calls. We have served Utahan’s for nearly 2 decades and would love the opportunity to see how can help.