Do most of the renters out there truly feel that they cannot qualify for a mortgage?

Asked by Mark Claessens e-Pro NHSS, Coon Rapids, MN Thu Jan 20, 2011

Help the community by answering this question:

+ web reference
Web reference:


Spirit Messi…, Agent, Tucson, AZ
Mon Jan 24, 2011
Scott, not sure what it is like where you are, but the majority of first time home buyers got off the fence after the second first time home tax benefit extension expired. Plus the rates were better then too. There are a lot of people who have no choice but to rent as they can not obtain a loan. The lending rules have changed, making it much more difficult to obtain a loan. Then there is the media, hearing about how 70% of Americans are upside down equity wise on their homes. So, yes I can see & understand why the rental market is up. As a Realtor, of course you don't need to sell me on home ownership. I do have empathy for their situation, some people have no choice but to rent in the current market.
1 vote
Dp2, , Virginia
Thu Jan 20, 2011
Your question has a bias: you presume that all or most renters want to own. Please realize that some renters don't want to own; they don't want the headaches/responsibilities that come with owning a home. Keep in mind that some people travel a lot for their jobs, and others need to move whenever their assignment changes. Renting is often a better option--or the lesser of 2 evils--for them. Additionally, some older couples (who have owned their own homes) prefer to downsize, and they prefer to not own during their twilight years. Some renters refuse to take on mortgages; they insist on buying their future homes only with cash. And the list goes on. . . .

My point is--contrary to the perception that some people have about all/many renters--that some renters are affluent and responsible enough to be able to own; yet, they opt to rent instead.
1 vote
Phil Rotondo, Agent, Melbourne, FL
Thu Jan 20, 2011
Good Morning Mark;
Not at all.
Most of the renters out there truly believe that leasing property makes sense with what is going on in their lives at the time.
Web Reference:
1 vote
Christine Ro…, Agent, Coon Rapids, MN
Wed Feb 9, 2011
Mark, I have to agree in some point with you... Renters in my experience, fall into three categories... 1) they don't want to own, 2) They don't know they can qualify for a mortgage and rates are so low that they might be able to buy for less than rent and lastly 3) They know they don't qualify. Sad but in my experience true. Spend some time with your rental dwellers and you will find the answers you are looking for.

There are so many options today that can get people on the path to home owners and with Taxes coming in many will have the necessary down to get into a starter home.
0 votes
Mark Claesse…, Agent, Coon Rapids, MN
Mon Jan 24, 2011
Okay, I think I need to jump back in here and qualify something. First, I apologize for the brevity, but you should all know that when you ask a question you are very limited with characters. And what I asked was as clear as I could be. No bias intended.

This all wraps around the statistics I just go one week ago from the NAR. The report stated (BTW I am going on a bit of memory here) that 86% of first time home buyers not only believed that the loan approval process was "very difficult", but that they really did not believe they would qualify. The second stat stated that somewhere around 90% of them said AFTER the process was over that it was "not difficult at all". The third stat was that only 5% of them did not get approved for a loan.

Translation: although the vast majority of first time home buyers though the approval process was going to be extremely difficult and did not believe they would qualify anyway, the fact remains that when it was all said and done . . . . 95% of them got approved for a loan and said, "Wow! That was way easier than I thought!"

So, with that Mark Claessens translation, I decided to ask the community if you had experienced the same thing or not. And yes, I am assuming 100% that we are talking about people that are currently renting, but that really wished they could own a home. And just so y'all can respect me a tad bit more, I am fully aware of the fact that there are people out there who must rent, who don't have a choice but to rent, or may even be fully aware that they can get approved for a new home tomorrow morning with flying colors . . . but are choosing to rent for a number of intelligent reasons.

With all that said . . . could we please go back to our discussion with this framework in mind? I believe that will help a lot, and I really would like to hear more about this. These stats really jumped out at me and shocked me.

Personally, I have experienced that the buyers I meet are skeptical and are somewhat apprehensive about engaging a loan officer. They often do mention that they don't think their credit is good enough and probably won't qualify, etc. And yet most do qualify. I was just shocked to hear these numbers and wonder if they shock any of you or not.

0 votes
Scott Hutchi…, Agent, Lakeville, MN
Mon Jan 24, 2011
I think most renters that are "approvable" know they are "approvable". They are not entering into the marketplace due to job security (lack of), flexibility of renting, and confidence in the housing market.

Scott Hutchinson
Edina Realty
Minnesota Real Estate (search ALL MLS listings / Bank-owned Search)
C: 612 396-0692
0 votes
Susan Hoffla…, Agent, Shoreview, MN
Thu Jan 20, 2011
Mark, I agree with the answers here. Many people who are renting like the flexibility that renting afford, especially in today's real estate market! I think renter only want to become owners when they know they are going to be in that property for enough length of time to make it worth their while.

That said, I'm sure there is a faction that has a belief that they will NEVER be able to qualify for a mortgage because of their credit or other issues. And, maybe they're right, unless they make some changes.
Web Reference:
0 votes
Bill Eckler, Agent, Venice, FL
Thu Jan 20, 2011
There are a variety of reasons why people do not elect to be home owners. In many cases, loan qualification is a major factor and is likely to continue to increase in the future.

0 votes
Suzanne MacD…, Agent, Morristown, NJ
Thu Jan 20, 2011
Hi Mark,

Not everyone wants to be a home owner, I don't get it, but there it is. A lot of renters CAN"T qualify for a mortgage, a lot of them are displaced homeowners these days and I am making a pretty good supplemental income convincing landlords they will make good tenants in spite of their recent financial difficulties. A lot don't know they can qualify for a mortgage due to the tremendous (and false) media hype these days. And a good many of them don't want the responsibility of homeownership.

While renters are still a good source of leads for first time home buyers, they are not as good a source as they once were owing to the fact that there are so many of them who truly can't qualify, those who don't want to buy because their stay in a particular area is transient, and the ones who don't want the responsiblity and are now mroe afraid than ever to purchase a home. I think smart realtors will add rental business to their mix for the foreseeable future until the fear factor can be quelled.

0 votes
Search Advice
Ask our community a question

Email me when…

Learn more