Until I understand your entire situation, it would be hard for me to second guess what happened. Your loan officer might be new in the loan profession and didn't understand the qualifications for that particular loan program (over promised). You must meet FICO (credit score), income, and ratio requirements so something might be wrong in that area. Also, when the lender pulled your credit report, something could have popped up that you weren't aware of. The bottom line is that something went wrong.
If you were declined a loan, you should have a clear understanding on why. Ask your loan officer. If he can't give you the answers you need, speak with his broker. Or speak with someone who has experience to get you a loan!
I'd be more than happy to talk to you about your situation. I've been in the mortgage industry twelve years. Call me at (661) 255-3335.
Cheryl Garner, Mortgage Expert
Fairview Mortgage Capital, Inc.
Going from 10% down to 20% down payment requirement is too much of a big differenceâ€”unless, like some previously said: you may have missed providing important financial information or your loan broker got greedy.
You need to know why they are requiring a larger down payment. If the answer they give you is based on your credit rating, they and you should have known this from the beginning when you were being prequalified.
If you didnâ€™t have the 20% down payment or didnâ€™t want to put 20% down, your realtor should have advised you not to make an offer, yet, and find another loan broker or different lender.
There are many good Real Estate professionals out thereâ€”you just happen to have come across one that perhaps is not experienced or doesn't care.
Good luck with your quest. I do hope everything turns out well for you.
The best thing you can do is get a referral from your agent. If your agent is good they will have developed relationships with lenders who want their business and will perform accordingly.
Please do not lump everyone in my profession, as if we are identical in he manner which we conduct our business, anymore than I would do this to yours.
This is from my website. It explains everything a borrower needs to know about a pre-approval: http://www.umboc.com/PageContent.aspx?PageID=189
I tell them what might kill the deal here: http://www.umboc.com/PageContent.aspx?PageID=180
Also, I explain my entire loan process here: http://www.umboc.com/HowGetLoan.aspx
And today's rates here: http://www.umboc.com/MortgageRates.aspx
My fees and settlement costs here: http://www.umboc.com/PageContent.aspx?PageID=89
After viewing the above, do you still think we all conduct our business in the same manner?
Happy funding, Rudi
There is NO excuse for what has happened to you except laziness on the part of the people you decided to work with, OR you withheld key financial information. Unfortunately, your story is not uncommon here on Trulia for Buyers who do not take financing step seriously.
The fact of the matter is some Loan and Real Estate Agents are lax in completing the very first step that SHOULD be completed when a client comes to them: A true Pre-Approval. To understand what SHOULD have happened please see: http://www.Steven-Anthony.com/GettingStarted
You can also review this post for a bit more opinion: http://www.trulia.com/voices/Home_Buying/Why_do_banks_want_a
By the way, Retail Lenders (Wells/BofA/etc) RARELY provide a True Pre-Approval, only Mortgage Broker/Bankers typically take the extra step to obtain an automated underwriting system approval (the icing on the proverbial "True Pre-Approval cake"). Also, while we're on the subject of Banks vs. Brokers, here's a short and quick GENERAL comparison BASED ON MY INDIVIDUAL EXPERIENCE between the two:
Retail Banks (Wells, BofA, Chase, etc.):
a) W2 employee Loan Officers NOT licensed by the State/Fed.
b) No Real Estate or Financial Training Required.
c) Access to Bankâ€™s single set of loan products.
d) When itâ€™s time to lock a rate you get their rate.
e) Very limited day-to-day info flow to Buyerâ€™s Agent.
a) W2 employee or Independent contractors Licensed by the State/Fed.
b) State/Federal continuing education and testing required.
c) Access to various Bank/Wholesale financing products and multiple versions of multiple loan products.
d) When itâ€™s time to lock a rate you get the dayâ€™s BEST rate between all funding sources.
e) Maximum info flow to Buyerâ€™s Agent based on relationships.
The last point (â€œeâ€) is always a key concern. Hereâ€™s why: There are 2 types of loan conditions that we need to stay on top of to meet contingency timelines of the purchase contract: 1) Prior-to-doc (PTD) conditions are those that must be satisfied before the lenderâ€™s underwriting department will generate and send loan docs for you to sign at escrow. 2) Prior-to-fund (PTF) conditions are those items that must be satisfied before the investor will â€œpush the buttonâ€ to send your new loan funds to escrow. To be proactive regarding #1 & #2, I ask for the lender-specific list of PTD/PTFs generated by the Underwriters and go over it to get ahead of any potential issues that may affect your funding, which could place your good faith deposit at risk, and/or lead to the money spent on appraisal/credit report/property inspections to be wasted.
Clearly, your most recent experience indicates this DID NOT occur.
Have you asked why ? 20% downpayments are usually for homes in $500K + range .
Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
Your situation is one of the main reasons we no longer deal with mortgage brokers. There have been too many times when they make promises on the front end to get the deal, only to come up short or with a much worse loan product midway through, forcing the buyer to back out or lose the property.
Do you have any documentation from the broker or the lender spelling out the terms of the loan? Has something changed in your financial picture that would cause them to double your down payment?
I would talk to your agent and get some referrals from other lenders. If you can get a reputable lender to tell you they can deliver, your agent can likely get an extension on the loan contingency and close of escrow date.
Lance King/Owner-Managing Broker
I have also recently heard stories about mortgage brokers, not the loan officers from a bank but those able to use many sources for loans, using a practice where they sometimes bet a rate will go down, that has been quoted to a borrower at a set rate, but the broker holds off locking it in hoping the rate will go down and they will make more originating the loan. Sometimes, from what I heard, they guess wrong and they would have to take money from their pockets to make up the loss and they would rather just kill the deal to avoid paying the difference out of their pocket. Paints an ugly picture, but I wonder how often it does happen out there.
Based on the information you provided I would suggest that you discuss this matter with (a) The Real Estate Agent that is representing you in this transaction, (b) the lender's representative, (c) the lender's representative's manager, (d) another lending institution.