Jump to content

First time buyer declined


mooneyes
 Share

The last post in this topic was posted 3428 days ago. 

 

We strongly encourage you to start a new post instead of replying to this one.

Recommended Posts

I am trying to get a mortgage to buy my first home. Some of my challenges are my fairly low income and large amount of student loan debt. In my area the amount I've spent on rent in the past five years = more than 1/2 the value of the property I am in. I would actually pay the same amount or less for a much larger place in my same neighborhood. I had worked for some time to get my credit in shape and have just been keeping it up the past couple of years. I pulled my credit last month. I was suprised that my credit score was much lower than what I got when I paid for a score last month. Last month I was told it was 760. The score the bank got was something like 698, 700, 702. I think this should be ok. Anyway I was very disappointed when the lender called today and said he just didn't think this would work out and I should try somewhere else. Later I officially got a notice that my income was too low. There are some medical collections on my records. I don't think that should effect getting a loan. The lender was trying to tell me they would want me to cancel my credit cards. I had been using them to build my credit. I had a couple of cards I use on a regular basis for low amounts. These cards were all things easily paid off like the $40 to Chevron. I use them and regularly pay them off. I am definately hesitant to close any accounts.

 

I'm not really sure where to go from here. I was pre-approved from this lender when they pulled my credit. I'd appreciate any advice. I've been dormant on this board for a long time but have never looked into this section.

Link to comment
Share on other sites


Medical collections WILL absolutely have an effect on getting a mortgage. A medical collection account is a derogatory collection trade line on your credit report, no different than any other collection account.

 

I would be very skeptical of this lender, especially when they told you to close credit cards, that doesn't sit well with me.

Link to comment
Share on other sites

You dont give enough numbers to really know what the situation is so taking them for what they have shared you either need to get more income (Maybe a coborrower?) or eliminate debt - The medical collection may or may not be an issue it is an underwriters decision - if the amount is large you may be asked to pay it off or denied?

I wouldnt close any accounts unless it were a condition of your approval from the underwriter - the only way I could think they would ask this would be if your debt to income was right on the edge and they were afraid you would add debt which would put you over...

Link to comment
Share on other sites

You said you have a lot of student loan debt... who are your loans with? Since your income is low, have you looked into doing an IBR program? This program bases your student loan payments off your income... if you qualified, it might lower your DTI ratios.

Link to comment
Share on other sites

My student loans are federal student loans. I just signed up for the IBR program. For july they have me on forebearance? (no payment due) and then the new amount starts Aug.5th. Before the IBR numbers it looked like I couldn't be considered for a loan. Really if a lender told me I needed to pay off the collections I would but they didn't tell me that. I don't have a way to get a co-signer. I think the medical debt is about $10,000 but I'd have to double check. I do have savings that would cover up to 20% downpayment although I would rather do less because it is likely I will have to buy a place in need of repairs.

 

thank you all for your suggestions and information.

Link to comment
Share on other sites

Can you give us some more numbers so we can give you better advice? What is your income? How are you paid (hourly, salary, etc)? What is the sales price on the home? What is your down payment? List your other monthly payments as they appear on your credit report.

Link to comment
Share on other sites

  • 2 weeks later...

I'm paid hourly. $13.50 I don't have a house picked out. I was looking in the $120K range because that seems to be a doable price. I can put a downpayment of up to 20% (but would prefer 10%). My student loans are now $190 a month.

 

I went back and did some math and realize that the lender must have given me what I would have qualified for if I didn't have student loans. I had been doing the math based on how much house I could buy for betwen $800-900 monthly (around what I pay in rent) Now that I have more information I am realizing this issue is the debit to income ratio. I don't have any way to lower the debit or change my income. I may have to look for something in bad repair.

 

I'm hoping I might find a lender that can work with me. So far they just say no.

 

Thanks for all the advice.

Link to comment
Share on other sites

The last post in this topic was posted 3428 days ago. 

 

We strongly encourage you to start a new post instead of replying to this one.

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

 Share




  • Member Statistics

    • Total Members
      185048
    • Most Online
      2046

    Newest Member
    Hattie
    Joined
×
×
  • Create New...

Important Information

Guidelines