David Saks: You've Been Turned Down For A Loan : What Now ?

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

You've Been Turned Down For A Loan : What Now ?

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What in the world are you going to do when you get turned down for your loan?

Well, there might be several options available to you. Just because the lender denied your loan it doesn't necessarily mean that your chances of obtaining a loan have been flushed down the toilet.

You should always ask the lender to give you the exact details of why you were turned down for the loan.

It might be something that you can remedy so that the loan might be resubmitted to the underwriter for reconsideration and eventually approved.

Usually, if the lender isn't willing to help you solve the problem, or if the problem just can't be corrected, you'll most likely get a written statement declaring that your application for credit has been denied, with the reasons for the denial included.

I think that's the law, actually.

Legal Eagles chime in here.

If for some reason you still believe that you can qualify for the loan go to another lender and tell them in clear and understandable language why your were denied by the other lender.

The original lender that turned you down might even want to try and help you find another source of money, if they're interested in helping you and increasing their reputation as good guys.

If the new lender thinks that the loan might be done, request that the the original loan application with the first lender be transferred from the original lender to the new lender.

I'm not absolutely sure, but I don't think that the original lender is required to transfer your loan application unless your applying for a VA or an FHA loan.

Help me out here, lenders !

Loan denial won't affect your credit.

I don't think there's anything in your credit report to indicate that you've ever been turned down for a loan.

Keep trying.

How has the lending scenario changed in the last four years? What are the forecasts for the days ahead?




David Saks



Time&Temp Memphis

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Comment balloon 7 commentsDavid Saks • May 26 2008 03:30AM

Comments

I am living proof. I was turned down by a bank because well I have zeroed out my income for years. I was trying for a HELOC on a home that I own free and clear and only taking about 20% equity out. They told me no I said get it down and you know what after going up the chain a little and being a pest. I got my Heloc :)
Posted by Heather the Realtor Orlando, Lake Mary, First Time Home Buyers, Bank Owned Homes (LemonTree Realty) over 11 years ago

If my clients get turned down because of credit issues, I tried to find out if they are interested in a lease purchase (only if there is no way for them to get approved for a loan now).  It get's them into the property of there choice.

Posted by Lorinda Ward, Serving, Hampton Roads Virginia. Norfolk, Chesapeake, Va Beach (Keffer Realty) over 11 years ago

Good going, Heather ! Perseverance paid off for you. Great comment and great to hear from you.

Posted by David Saks ((retired)) over 11 years ago

Nice, alternative way to approach various financing options available to your clients, Lorinda. Great to hear from you today.

Posted by David Saks ((retired)) over 11 years ago

David,

As you are well aware, lending has significantly tightened in all aspect over the last year. Previously, of course, we were still adding loan programs that enable anyone to qualify, and the loan competition was actually pushing even the riskier loan interest rates down.

People used to say, I'm not paying that rate. These same people now cannot get financing.

Programs still exist, even 100% options.

Except for hard policies, like those for Chapter 7 and foreclosures, most people who cannot qualify today, can qualify tomorrow.

Credit rating management is important, both for qualifying and for tiered pricing.

I think that is the focus for the forseeable future. Borrowers must be aware how their credit is rated. It really requires management now. The problem is that many of the paid credit restoration/management firms either are not competent or are not needed and charge too much for what they provide.

Buyers need, more than ever, to prepare for their purchase by having their qualifications reviewed. Not much can be done if a person has filed taxes showing little income, but a good deal can be done to improve the credit rating.

It actually is a good change, in that regard.

Richard

Posted by Richard Byron Smith, NMLS #184479, Mortgage Loan Officer (Mortgage Loan Officer, Fairway Independent Mortgage Corporation NMLS #2289) over 11 years ago

Great information, Richard. Also, congratulations on your piano lessons. Try to set an hour or so aside each day to practice. It'll bring a great deal of pleasure to your life in the years to come. Thanks for your comment and I'm honored that you enjoyed the music accompanying my profile.

Posted by David Saks ((retired)) over 11 years ago

David,

I reread my comment and would like to amend it a little. Paid credit repair companies can in many instances help a good deal. I personally use them at times, if the borrower cannot work through the issues.

Credit repair can be time consuming. But there are many things that can be done in one sitting, using the free credit reports. It can be done with just an investment of time.

For those without the time or inclination, and for those with extensive repair needed, it can be overwhelming. Hire a good repair company that is recommended by a competent loan officer.

The problem with my piano lessons is at this time Active Rain. But maybe your profile will inspire me to return, as well as the fear of my instructor, the piano nazi, who will be back from vacation soon.

Richard

Posted by Richard Byron Smith, NMLS #184479, Mortgage Loan Officer (Mortgage Loan Officer, Fairway Independent Mortgage Corporation NMLS #2289) over 11 years ago

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