Home Buying in 92563>Question Details

The Boswell…, Home Buyer in 92563

Why are qualified buyers being punished for past lending & borrowing "sins?"

Asked by The Boswell Family, 92563 Tue Aug 19, 2008

For example: "Hypothetically" take a military family considered well-qualified just 2 years prior (718 plus credit score, full savings & checking, VA loan exhausted but 3% down payment accessible, fully documented, non-flippers/non-investors) now cannot obtain reasonable financing with same qualification criteria.

Financial "institutions" and brokers were passing out loans like Halloween candy but now seem to be peculiarly PERSNICKETY about how and who gets approved. What's going on?

“Curiouser and curiouser!” Cried Alice...

Help the community by answering this question:


Yes, perhaps the financial market situation has made getting a loan more difficult for you in particular, but as with everything in life, it all depends on your perspective. While I don't necessarily agree with Jonathan below in that you are being "rewarded" (and I'm sure it was possibly stated "tongue in cheek"), he does have a good point. Several years ago, many other borrowers (probably in a similar financial situation as yourself) felt that they were well qualified, had sufficient credit scores, down payment, etc..., and became the happy recipients of an adjustable rate mortgage on a home they stretched for. Fast forward a couple of years to 2008, and Voila', look what happened.

Now, the lending institutions are returning to their conservative states and as a result, fewer borrowers can qualify (or as some would say, be put in jeopardy because they bit off more than they could chew). We as a nation, have become so infatuated with the lifestyles of the rich and famous, that we stretch way beyond our means. By this, I mean that we want the best of things right now instead of biding our time. Both of my parents had 6 siblings and grew up in small apartments, often doubling and tripling up in bedrooms. Nowadays, some families feel they need one bedroom AND bath for each person in the household.

Again, Jonathan makes a good point about inventory levels and interest rates. While I don't know your particular needs in a home, I would suggest reviewing your criteria and perhaps scaling back to a home size and price range that fits within the lender's criteria. It may not be the ideal home, or the home of your dreams, but what you will discover over time, is that no home ever is.

Best of luck!

1 vote Thank Flag Link Tue Aug 19, 2008
If someone offers a 3% investment (downpayment) if you put up the other 97% would you partner in buying a house with them? Only if the house was a good investment right? Houses now are generally a bad investment. Other options to banks will provide better returns on their money and with much much less risk. Your aren't being punished, Banks are just realizing how stupid 3% down home loans were.
The only reason anyone had 3% down loans before the boom was government regulations.
1 vote Thank Flag Link Tue Aug 19, 2008
Conisder yourself fortunate. Many people purchased well over what they really can afford becasue of the guidelines you presented above. I actually feel you are being rewarded. Priced are at all time lows, rates are still relatively historically low and the inventory is never ending.
1 vote Thank Flag Link Tue Aug 19, 2008
That is a question I ask myself as well. I have wonderful clients who are having a difficult time with loan programs and you are exactly right you are paying for someone else's sins. For you though I am quite surprised you are having a hard time getting a loan. Are you going through a "Broker" or a "Direct Lender" to get your loan? Try going through an experienced Direct Lender and I think you will find that you have many more options than you thought and that you are easily qualified with little or no problems. Let me know if you need the name and number of a great direct lender and I will be happy to give you the one I recommend to my clients. Good luck!!!
0 votes Thank Flag Link Tue Aug 19, 2008
The bank is putting up a lot of money and they have a right to know past and present information for them to make the best decision they can. Of course the more information they have the better their decision. I think that's their logic whether it sounds logical to you or not.
0 votes Thank Flag Link Tue Aug 19, 2008
The same lenders who made bad approval decisions are now appearing to make bad denial decisions. I suspect that the real problem is that it's OK to make bad decisions as long as you have government assistance to bail you out. It's nothing personal... just your tax dollar at work.
0 votes Thank Flag Link Tue Aug 19, 2008
the banks have pulled up the sidewalks when giving out new loans, i have people with 720 score turned down. You need to fin a trusted mortgage broker, not an internet lender, have them find the right program for you. they are out there. check out the FHA 3% down program as well. Good luck
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Tue Aug 19, 2008
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