No one likes to be told “no.” Rejection hurts. And having your application for a loan declined is particularly devastating, because it throws your entire dream of homeownership into doubt. Still, just because one lender rejects your loan application doesn’t mean you’ll never be able to buy a home. So, if you didn’t get approved for a loan, its recommended that you talk your realtor. Realtors can help you in ways you can’t imagine.
There are numerous apparent reasons why one may not get approved for a mortgage. Some of them include: low credit scores, high debt-to-income ratio, insufficient down payment, and a recent change in one’s financial situation such as loss of job.
How can a realtor help you?
Low credit scores.
Remember, when you get denied a loan due to low credit scores, it doesn’t certainly mean you have low credit reports. Sometimes there may be errors in your credit reports that led to a low credit score. A study 2013 federal Trade Commission survey revealed that one in four Americans said that they spotted errors on their credit reports.
A realtor can help you to easily identify any errors on your credit reports. In case of any errors on your credit reports, it would take about 30 days or more to get them removed. However, there’s a way around this. If you let your lender take care of the legwork, it would take fewer days to get the error removed. And since realtors are very conversant on such issues, they can connect you with good lenders who can take over the process for you.
“Lenders are able to do what’s known as a rapid rescore, which can get errors removed within five to seven business days,” says Richard Redmond, mortgage broker at All California Mortgage in Larkspur and author of ‘Mortgages: The Insider’s Guide.’
High debt-to-income ratio.
When you get denied a loan because of your debt-to-income ratio, do not give up. That just means that you income from your income-generating streams isn’t high enough to settle your debts. However, you should remember that debt-to-income ratio varies across different lenders.
“It’s very common to be turned down by one lender and then be able to get approved by several others,” says Redmond. “Different lenders have different debt-to-income requirements.”
This means that you can try another lender. But you can take your chances and approach any lender. To avoid wasting more time, this is where you need your realtor. Realtors are conversant with these lenders and they know their terms and conditions to go get approved for a mortgage. Therefore, a realtor is your best chance of getting to a lender who will accept your debt-to-income ratio.
When you don’t get preapproved for a loan various reasons, do not give up since that’s not the end of it. Consult your realtor and they may know a thing or two on how to get around it.