Recently I had a client come to me that was declined for a Mortgage with another broker. She was unsure why. We did an application and when I pulled her Equifax credit score it came up as a 0. This would be why she was declined. I instantly pulled her Trans Union credit bureau and her score was well above 700. Giving her an approval with several lenders that except Trans Union credit reports. I also called Equifax and discussed the 0 credit score with them, it turned out she had 2 reports with them and once they were merged it fixed the problem. Educating my client to watch her credit reports and not just rely on them to ensure its right. In the long run, the client is a happy home owner.
While collaborating with a Veteran to obtain a VA home loan, the customer’s loan declined due to no VA Entitlements. Although he has a DD form 214 the VA would not issue a Certificate of Eligibility (COE), After a closer look at his DD form 214, we found out he was discharged from active service, 2 months short of being eligible for his COE. The Solution was easier than you would think? He had low credit scores and truly little money to put down, so we flipped to an FHA with a DPA loan, and he was able to close on time. He was extremely happy and turned what was a dead VA Loan into a happy homeowner. David Cloe
Veterans facing initial declines on VA loans may actually qualify due to various reasons often overlooked. Here are some key insights based on loans that my team has successfully closed after being denied by other lenders: 1) Credit Score: While VA guidelines don't specify a minimum credit score, some lenders have overlays requiring a specific score. 2) Loan Limits: Despite VA removing loan limits for qualifying Veterans in higher price points, some lenders still impose them. 3) Multiple VA Loans: Veterans can have multiple VA loans over their lifetime, even simultaneously if they qualify and have sufficient entitlement. 4) Partial Entitlement & Down Payment: Many are incorrectly advised to make large down payments with partial entitlement. For qualifying veterans, the down payment should only be 25% of the difference between their remaining benefit and the new purchase price. And of course, my legal department would want me to mention that this is not a commitment to lend, that other restrictions may apply, all loans are subject to approval, and that information is subject to change without notice.
We love getting this Realtor call. Their buyers selected the lender and are now Declined for the loan. Most of the time the reason for the decline is preventable or can be addressed with additional documentation and/or a different loan product. Digital lenders do not have local community knowledge about proper tax rates or property insurance costs. This causes errors. They lack training in self employed borrowers and alternate documentation programs. They fail at Agency guidelines for FHA, VA, and USDA. We just helped a buyer with limited income close on a $500K purchase after two retail lenders told him he wasn't qualified. They did not ask enough questions.
Let's not beat around the bush... Mortgage loans are incredibly challenging. Luckily at X2 Mortgage we're able to get very creative when it comes to loan approvals as we work closely with underwriting. In a particular scenario, we had a client get denied by two lenders due to excessive debt to income ratio before contacting me. Once we had an initial conversation with the client, we came up a game plan to squeeze out just a tad more qualifying income. By slightly increasing income and providing a much lower mortgage rate, we were able to get the debt to income ratio in line for an approval. Not to mention that we got the client all closed up in a matter of 2 weeks to stay on schedule for their closing!