People looking to buy or refinance a home may have been turned down by another mortgage company because of their financial circumstances. If you’ve been turned down before and you think the odds are against it, don’t give up. The first step to failure is not to try. Simply put, don’t be that client who says, “I don’t want to apply because I don’t want to waste your time.” Here’s what you should consider.
Every mortgage company in America today has certain things they must do to be compliant. A compliance mortgage company must meet a federal threshold called ATR, which stands for Repayment Capacity. This means the mortgage company needs to pull a copy of your credit report, see proof of your income, and assess your ability to repay that loan. A mortgage company can’t make a credit decision or give you a correct quote for rates and fees without seeing all your documents: your tax returns if you’re self-employed, a credit report, and all the assets you have in the bank. If you’re like “well, I’m self-employed, I don’t have my income taxes. I don’t want to waste your time. Lose that thought and here’s why; a quality mortgage lender can explain where you are now and what it will take to help you succeed. Even if that means the process takes a bit longer.
If one mortgage company isn’t willing to do this, find another. Same thing if you think you have bad credit. If you think you have bad credit, the reality is that you probably do. However, that doesn’t mean the mortgage company can’t help you succeed when it comes to buying or refinancing a home. This means letting them pull a copy of your credit report. If your credit score is bad and you think getting a credit check will hurt your score even more, it probably won’t hurt your score any more than what made it bad in the first place. In other words, go to the lender. Let them do what they do well and when interviewing the right company to work with, choose one that has the forward-thinking approach in mind. Someone who will work with you and is willing to give you time and energy. Saying to the lender, “I don’t want to waste your time because I don’t think I qualify” is a big waste of everyone’s time, instead of just providing them with the documents and letting them go through the process. You know you have a good lender when they are more interested in connecting with you as a consumer than helping you immediately and committing to something you might not otherwise want. You want a forward-thinking lender who has a long-term approach in mind and who can work with you for as long as needed if your financial situation runs into trouble.
Scott Sheldon is a local mortgage lender, with a decade of experience helping consumers purchase and refinance primary homes, vacation homes and investment properties. Learn more at www.sonomacountymortgages.com.