A real estate agent can still help you if your credit is not quite up to the minimum. Information and guidance is still available!
Does Your Lender (or Agent) Leave You Out in the Cold Just Because You Don't Qualify Right NOW?
So you're ready to buy a house and you do the smart thing and consult with a lender first. You're already ahead of many just by taking this small but very important first step. You've completed the application and your credit has been pulled (it's not completely warped, but just a few blemishes). Your mortgage loan officers sends it to underwriting for review and analysis and as it turns out, you won't be able to qualify for a mortgage loan right now.
Disappointed and perhaps a bit discouraged?
Of course you are and even more so if your loan officer did not discuss with you a plan to get your "credit house" in order. If your loan officer simply came back and told you that you could not qualify at this time without consulting with you on a plan of action and some timelines to shoot for, then perhaps you should reconsider this relationship.
No I am not talking about if you have credit issues that puts you completely in the dumps with no way out except with a lifeboat and lifeline. But your loan officer should be able to offer helpful suggestions to get you on your way. They should be able to help you with coming up with a plan to eliminate issues in order of priority. In other words, what issues will have the greatest impact on your successful qualification for a mortgage loan.
But don't forget to be proactive in the process
- Ask your loan officer about how different types of debt may affect your chances for loan approval.
- Ask about whether paying off a debt would be more beneficial than paying down a debt
- Some lenders may still use alternative credit for scoring purposes in case you have little or no established credit. Alternative credit may be debts such as cell phone bills, home phone service, cable, utilities, buy here-pay here credit, etc.
- Ask if they know how much your score will increase with each recommended course of action. For example, if you pay off a particular credit card, how much might your score increase in points? I have worked with lenders who have been able to provide this information (but don't discount the lender if he does not know this information).
Like Momma Used to Say: Delay Does Not Mean Denial
The bottom line here is that just because you don't qualify for a loan right now, your loan officer should not leave you hanging because you will not be bringing any immediate business to that company.
We're not talking about if you have totally disregarded your credit responsibility and haven't paid anyone since Shep was a puppy. But rather, if you've been rather responsible with your credit, but have a few blemishes, your loan officer should be willing to hang in there with you and follow through as long as you're making some effort to achieve the goals that the lender has outlined for you to get you "loan ready."
By the way, you should use a similar model in determining which real estate agent you'll be using as well. Just because you are not ready to buy now, doesn't mean we should kick you to the curb until you are ready. We'll work in tandem with your loan officer to provide you with the best possible service before and after the sale. But remember, our willingness is more often than note, tied to your efforts to cooperate and progress towards your goal.