Financing in Houston>Question Details

Danielle All…, Home Buyer in Houston, TX

One broker said we qualify for a fha loans, another broker said we do not qualify.

Asked by Danielle Allen, Houston, TX Mon Jun 16, 2008

Do you think the second company said no, because they will not make as much off the loan?

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The answer is not a simple one, unfortunately. Lenders rules are different for every lender. FHA makes the rules for the lender to get a guarantee from HUD for the loan they make using their own rules.
When one broker or banker turns you down, it does not automatically mean that they all will.
In today's market all lenders are skittish about being accused of not following stringent guidelines in making loans and then having the loan come back and have to be carried by the bank or broker who wrote it in the first place.
Similarly, appraisers are skittish to give too high a value to a property and be accused of doing something wrong. The big problems in California, Nevada and other places (not as big here in Texas) that stop sub-prime lending completely have also caused major changes in FHA rules, and lender rules. Sometimes these rules a couple of times a month. Your loan application can start looking good, and then after the rule change, look undo-able.
It's easy to blame every rejection on greedy people, but fear explains it more accurately. You were probably turned down because the program (loan requirements) no longer permit: your credit score, your debt-to-income ratio, your work history, your loan-to-value ratio, or some other factor unrelated to making money off of you. A broker doesn't make any money on a loan he turns down.
It is far better to make some money off a deal than no money at all. Any Realtor or loan officer will tell you that. And as thin as the market is, nobody is turning away business.
1 vote Thank Flag Link Mon Jul 21, 2008
No, different lenders have different guidlines on loans. Don't always presume it's one way, some will say they can, when in fact they can't. They just want to get you in the door and then change the program at a later date. This party can go both ways. Good Luck
1 vote Thank Flag Link Mon Jun 16, 2008
Depends on the terms of what they mean by not qualify. Is the loan amount outside of FHA limits, are your credit scores to low or below 580, are debt ratios to high, etc?

Also as mentioned in this post every lender is different. The key word is lender, you definitely want to work with a direct lender vs. a broker if you feel that you may have some challenges. In house underwriting helps a file out tremendously. At Iwayloan we have a proactive underwriter who looks for more reasons to approve a loan vs. decline. We are a true Mortgage Banker and underwrite FHA loans in house. Rates are definitely competitive.

If you would like more info you are more then welcome to call me direct at 877 886 5626 ex 138. I can qualify you instantly over the phone and will process your loan for approval with no charges upfront.

0 votes Thank Flag Link Fri Aug 1, 2008
I think you need to talk to a loan officer who specializes in FHA financing. If you don't have one in Houston. Give Lesley Guerrero a call at United Lending 512-592-5464.

Carol Pease
0 votes Thank Flag Link Mon Jul 28, 2008
Every lender is different with different guidelines. So it’s very possible for one bank to approve you and another bank to say “NO.” This is a great reason to work with a mortgage broker over a bank as most banks and retail places offer one set of loan programs. Don’t expect Wells Fargo to show you Countywide programs.

Texas Mortgage brokers, like me, simply have more options and in today’s times—borrowers need every option available. Also, retail banks have strict profit guidelines and if your loan isn’t profitable enough for them—they’ll turn you down. Banks have enormous overheads to carry and who do you think pays these costs…borrowers. This is really where the mortgage broker model came from…mortgage brokers offer lower rates, lower closing costs as a general rule.

However, let’s say you go to bank #1 and get approved on a 5% down, 95% loan. But bank #2 says “NO because you want an 80/15 to avoid PMI. Well, they are both 95% loans but the 80/15 is totally different than then single loan 95%. So this is one example where a, on the surface, a borrower gets approved for one loan but not for the other.

VERY IMPORTANT: If the bank approves you with unimproved taxes—please walk away. Builder’s mortgage companies will often “approve” you with unimproved (artificially low) taxes but this is a scam. Walk away if you’re builder’s mortgage company approves you using unimproved taxes.

Hope this helps, visit if you need me.
0 votes Thank Flag Link Mon Jul 28, 2008 could be neither one is totally correct....i have done low risk, and higher risk, tough mortgage financing for almost 14 years...i also do medium and higher risk me anytime to talk.bob mcclure- mortgage now- farmington, michigan...i am licensed in youe state....(248) 974-4444
0 votes Thank Flag Link Sun Jul 27, 2008

No , what occured is that you called OK Joe, the mortgage company that tell every one, that they can get a loan,

Then you go off, present a purchase agreement, then guess what, we got problems with your loan....
but we got this subprime package just for you!

Mortgage companies generally make the same thing on loans, some mortgage companies are more honest that others and will tell you that you cannot qualify
0 votes Thank Flag Link Sun Jul 20, 2008
Bottom line is that you need to submit a full loan package to be underwritten to see if you qualify. That is the only way to know.
Web Reference:
0 votes Thank Flag Link Sun Jul 20, 2008
FHA guidelines are set by HUD(Dept of Housing & Urban Development).
Some lenders will 'enhance' those guidelines.... which means that they tack on extra requirements.
Another reason could be that the lender who denied you may not even have access to FHA programs.
0 votes Thank Flag Link Sun Jul 20, 2008
The answer may be that one of the lenders doesn't want to work as hard for you! FHA loans require alot of work and paperwork, some brokers do not want to deal with them. It is much easier to go Conventional Loans, they are much quicker and less hassle! Right now the way to go is FHA, you need to find a trustworthy lender and be careful on who you choose. You need to hire an agent who has a strong financial background to help you with this, you CANNOT do this on your own. Please call me if you need assistance...Estella Alas (832) 723-1683.
0 votes Thank Flag Link Wed Jun 18, 2008
Leesa, I know they are the same all over but as you said, if one did a DU it may not have been approved and that lender might not allow the manual, not typical but possible. Also something may have come up different on the report, as they used a different company.
0 votes Thank Flag Link Tue Jun 17, 2008
Michael FHA guidleines are basically the same however if for some reason you applied with the lenders at different times there was a recent upgrade to the underwriting engine that could make it harder for you to be approved. Meaning if you got pre approved a couple of weeks ago before the upgrade and that loan officer ran your loan for approval and got the approval they have you approved. The next loan officer may have ran your loan after the upgrade and maybe something caused the loan to not get approval at that time. Besides an automated approval FHA loans can also be submitted for a manual underwrite meaning it is up to that specific underwriter as to whether the loan is approved or not. I would as mentioned go to each loan officer you have worked with and ask more questions get specifics as to why you are approved or not approved.

Good luck I know it can be frustrating just ask all of the questions you can to be sure you are approved before you start house hunting it will make you much happier in the long run. You can also ask your loan officer to submit the complete loan file to underwriting minus the appraisal and a contract and ask for full credit approval ...then you know you will be good for the next 90 days.

Let me know if I can help in anyway or if you have additional questions.

Leesa Sandoval
Sr Loan Officer/PrimeLending
Direct 972-407-7922
0 votes Thank Flag Link Tue Jun 17, 2008
You can go back to both and ask why you qualify or don't qualify. Likely if you qualify for FHA and that is the route you need to go, they will want to do that for you. They stand to make more off of FHA. I would definately want to research this more before finding a house. Ask the one saying you DONT qualify to tell you why, and then go to the second one and ask about the reasons.
Web Reference:
0 votes Thank Flag Link Tue Jun 17, 2008
Bruce Lynn, Real Estate Pro in Coppell, TX
Michael is correct not all brokers can do all the loans available. I am a Dallas realtor and Dallas home mortgage loan officer.
0 votes Thank Flag Link Mon Jun 16, 2008
Hi Danielle. Did the second company say why they thought you didn't qualify? Most likely it doesn't have to do with what they are making off the loan. What information of yours have they looked at? The way to determine if you qualify if to look at your overall situation...length of employment, income, debts, credit score, price of the property you're looking at...this is how a lender or broker can get a good idea of what you can qualify for. I would recommend having both brokers review your overall situation thoroughly so that you can get a solid idea of what you qualify for or if you don't, why it is you don't. FHA is a great program and their loans require that you show the lender documented proof of the information you put on your application. Make sure both brokers have your complete information, including what I mentioned above. If you have any question, feel free to contact me.
-Nato Ruiz
0 votes Thank Flag Link Mon Jun 16, 2008
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