1. Always ask the lender why it was denied! By law, you have the right to receive the denial disclosure letter from the lender, but it may be very general information or a form letter. Ask your loan officer to explain it in detail.2. Look for a lender that uses a different appraisal company. Lowball appraisals kill many refinances and purchases, because they are a conservative estimate of value. Look for a lender that uses a different appraisal company. Just because one lender’s appraisal was low doesn’t mean that is the only value. Each appraiser has their subjective opinion.
3. Seek lenders that have more flexible loan program guidelines. For example, some lenders don’t allow lower FICO scores than 500, down payments from a business account, etc. Lenders deny loans because their guidelines are strict. As an example, community banks sometimes have easier loan qualification standards than the big bank chains. The Mortgage Fee Coach can help you find eager, quality lenders who want your business.
4. Make sure the lender hasn’t made any mistakes! Inexperienced loan originators, processors and underwriters sometimes make mistakes or don’t know how to structure a loan so that it becomes approved. Ask questions. Something may have been overlooked or not included.
5. Wait and apply when banks are in more of a lending mood. When interest rates are down, they often reject more than they accept.
6. Pay down the balance on a couple of credit cards or sell the car that has a high payment and loan balance. Many banks look at your debt-to-income (DTI) ratio to see if you will be able to afford the Principal and Interest (P & I) payments for your loan. Fannie Mae sets a 45 percent debt-to-income ratio (limit), but maybe the bank you chose will accept no more than 38 percent. If your credit card balances are too high, you may have to wait and apply again when your balances are lower or when your payment history is a little better. You may want to analyze your finances before you actually apply to see if you have a good chance.
7. Best solution, contact the Mortgage Fee Coach for a lender. See testimonials from other happy clients. Here’s an example: A borrower was denied, then found MFC. He found a lender with an appraisal company that valued a home $14,000 higher than another lender. Results:
• A loan approval
• Mortgage interest rate was lowered from 7% to 3.875%
• Saving $788 per month or $9,456 per year
• A very happy homeowner!
Bottom Line:
Don’t take no for an answer. Ask questions, educate yourself (by checking this blog as an example), or better yet, hire me, The Mortgage Fee Coach, to help you get your loan approved, and to make sure you get the Lowest Rate with the Best Quality Lender. Email or call 949-484-6322 NOW. The first 15 minutes are FREE!
My goal is to help you save time and money, and experience peace of mind during the home buying or refinancing process.