Why it’s Harder to Qualify for a Loan These Days
Posted on | July 19, 2010 | No Comments
There are several reasons it’s harder to qualify for a loan than ever before and it’s not all about your personal credit, though credit is a large factor in the process. The guidelines have changed and set the bar higher so even though you may have had okay credit before, you may either fall below the current guidelines or have to pay in points for your current credit position. If you are below the minimum credit guidelines then you need to work on getting your credit score up before you can get a loan to purchase a home. If you are above the minimum but below the optimum credit score there will be a risk based cost that is applied and then you have to decide if you want to wait or pay that cost.
The other factor in qualifying that many forget about is the property; it too has to qualify as good enough to lend against in the eyes of the lender. Banks and mortgage companies have been caught with so much sub-par property that every house has to go through an underwriting appraisal process in order to determine if it is suitable to finance. If there is something wrong with the property then either repairs have to be made or the deal will not go through.
Of course, there are loans such as the 203K that is made for renovating and repairing a house. If you find you are in a situation where the property needs a lot of TLC, a 203K might be the answer to your prayers as long as everything else is in order.
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