Jesus Chuy G…, Real Estate Pro in Laredo, TX

what options do you have for buyers that do not qualify for a loan?

Asked by Jesus Chuy Guerra, Laredo, TX Sat May 19, 2012

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Debra (Debbi…, Agent, Livingston, NJ
Sat May 19, 2012
tell them to buy a winning lottery ticket?

seriously - if someone doesn't qualify, they shouldn't be buying!

Best "option" - fix your credit and save money.

A lot of people happily live out their lives as tenants.
1 vote
John Souerbry, Agent, Fairfield, CA
Sat May 19, 2012
Buying is not for everyone and REALTORS(R) are not qualified to tell anyone whether they should or should not buy - we're not financial professionals.
I frequently send "buyers" to a financial counselor to get their finances cleaned up before they dig a deeper hole by buying a home that will set them further behind.
I also realize that some people are just bad with money and should never indebt themselves to the level home ownership requires. It's just a fact of life - not everyone should be a home buyer.
1 vote
Annette Law…, Agent, Palm Harbor, FL
Sun May 20, 2012
"Do not qualify for a loan." (you did not say they had bad credit) That describes nearly every business owner, those whose incomes are contingency based...well, essentially everyone not receiving a W-2 from an employer. That is a LOT of people and includes every full time real estate professional.

In an overwhelming number of these cases these folks are cash rich but the big banks have elected to make it impossible for them to be financed. Thank goodness the big banks are only one of 15 ways to finance a home purchase. Local banks, community bands and credit unions offer more flexible lending programs.

These are perfect A-List buyer candidates. Based on the purchase intentions of the buyer, the buyers situation and the agility of the seller, there are eleven additional financing options. Many who have short sales or foreclosures on record are very qualified buyers also.

However, those with bad credit will need to spend the time, money and effort to get the boat to float again.
0 votes
Scott Hulen, , 64068
Sun May 20, 2012
Sometimes there are good reasons someone does not qualify for a loan in the standard market. I have a couple of banks which will consider nonconforming lending under the right circumstances. Their general guidelines include recent good credit history, no outstanding judgments and roughly a 25% down payment. If these general terms are met then the terms of the loan might look like this: 3-5 year arm, on a 30 year amortization at roughly 5-6%.
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Marla McWill…, Agent, Coeur d Alene, ID
Sun May 20, 2012
About the only options (as Terri said below) would be "seller financing"....which can be beneficial for both Buyers and Sellers.

Buyers that would otherwise not qualify, and also have less in the way of closing costs. If they can work to improve their credit over the next few years while buying the house, this is yet another benefit.

Sellers benefit from the increased "net" on the house due to the interest income. Also, they pay "capital gains" (if applicable) only on that years income stream!

Can be a WIN-WIN situation!!
0 votes
Felix Hung, Agent, Huntington Beach, CA
Sat May 19, 2012
I tell them to talk to a mortgage professional and a credit repair professional if needed to fix whatever issues are preventing them from buying. There are rent to own programs available but it depends on what terms the seller is offering and if they're comfortable with them.
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Jesus Chuy G…, Agent, Laredo, TX
Sat May 19, 2012
Daniel I agree with the fixing of financial house part, and most of us Realtors are ethical, I apologize that you had that expericance with a Realtor. As for me I help buyers that do not qualify to purchase with a game plan to get there, reduce debt to income ratios, help their financial house to be better and be able to qualify confortably. it's up to them to follow it.
0 votes
Daniel, , Baton Rouge, LA
Sat May 19, 2012
ohhh the american consumer!

Bad credit is a symptom of your lifestyle. Your symptoms are telling you to take action against your financial ills.

Realtors get paid when a deal is done, IF they BELIEVE all that ethics garbage that they spout, The WOULD tell you to fix your financial house BEFORE trying to add more debt.
0 votes
Terri Vellios, Agent, Campbell, CA
Sat May 19, 2012
They can rent. Rent to own. Seller may be open to financing. Joint purchase with someone who can qualify....
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0 votes
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