Home Buying in 45856>Question Details

Charlesahieg…, Home Buyer in Canton, OH

Why can't I get a loan?

Asked by Charlesahiegel, Canton, OH Thu Mar 14, 2013

I have a credit score of 541 and was just denied a home loan. Here's the issue...I can get approved to rent an apartment for $568 a month and the home loan would have cost me only $160 a month. How does that make sense? With that low of a monthly payment why would I not get approved? I have only two items on my credit report a credit card that was paid on time and paid off and closed 2 years ago. The second is my car payment of $268 opened last August paid on time? I'm just frustrated and confused by what banks are actually looking for in a homebuyer!!

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Your FICO score is an I-love-debt score, isn’t it? Does it factor in your income—or, even better, your debt-to-income ratio? Nope. Does it factor in your savings accounts, net worth—anything other than debt? Absolutely not.

The only way to have a good credit score is to go into debt, stay in debt, and continually pay your accounts perfectly—without adding too much debt or paying too much off. In other words, stay in debt for as long as you can. How ridiculous is that?

I'm 25 worked at the same place for 7 years make $36,000 yr. I've had one credit card(which was a prepay through my bank), got my first loan which was a car loan this past August. Have absolutely nothing negative financially in my life, you ask me I'm the perfect candidate to e a first time home buyer!

The house is a 4 bedroom 1500sq ft fixer upper listed at $14,500!

If you ask me banks don't look at someone's financial picture in the correct way, this is why we had the housing crash and why so many houses(at least in my area) sit empty!
0 votes Thank Flag Link Thu Mar 14, 2013
Banks are looking for someone who does not have BAD credit. Your middle credit score needs to be AT LEAST 580.

Also how much was the home you wanted to buy for $160 per month? What about taxes and insurance? How much do you have saved for down payment and closing costs?
0 votes Thank Flag Link Thu Mar 14, 2013
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