You have decided that it is time to get out of the apartment, and you’ve started looking at homes that you THINK will fit in your budget. Before you even see the inside of any of the homes, your Real Estate Professional recommends that you get pre-approved for a home loan. Huh? O.K. So you call your bank or a mortgage broker that you know and you submit your application. After a few days you are sure that they will approve you, and then you get the call. I’m sorry Mr. & Mrs. Smith but we cannot approve you for a loan at this time. Your heart sinks into your stomach.
I’m sure that either this has happened to you OR you know someone this has happened to. Do not take the first NO with a grain of salt. Get a 2nd opinion! There might be something that just needs correcting, or the other mortgage company might have easier qualifications. Many people don’t want to get a 2nd opinion because they think the inquiries will lower their credit score. As long as the inquiries are within a certain time frame, usually 2 weeks, they will count as just 1 inquiry.
If you know that you have items that need correcting, either by lowering the debt to limit ratio or you just have items that need correcting on your credit report, you might look to a credit repair company. But beware; there are MANY scrupulous companies out there. Many times the mortgage companies have someone who they can refer you to, so ask them for a referral.
Check out alternative financing. Not all home loans are Fannie Mae or Freddie Mac. There are private lenders who lend private money, and they establish their own qualifying guidelines. Another financing technique is Seller Financing. If the owner of the home would consider extending you credit for buying their home, that is their decision, but it is an option.
There are many non-traditional ways to finance a house. Many of them are described in this article, What To Do If You Are Turned Down for a Mortgage. We hope that you found this information helpful. That is what Team Tork is all about: giving great information and education to the community. If you are in the market to buy your next home, or thinking of selling your home, call me. I have the experience and knowledge to get the job done. Call me directly at 651-379-4138 or 651-210-1038, or if you would rather, send me an email to Joey@TeamTorkRealEstate.com. We have more educational information on our website: www.TeamTorkRealEstate.com.