FIVE OPTIONS WHEN
THE LENDER SAYS NO

By Tricia Morris,
President, Premiere Mortgage

What are your options when the lender says you don’t qualify for a mortgage loan. Should you walk away and throw in the towel? Lenders are in business to make loans. It may be that there are certain aspects of the loan that led to its failure to qualify. Sit down with the lender and walk through your questions.

Here are five steps you can take when the answer is “No.”

Number One: Is the problem one that relates to the borrower? Don’t be afraid to ask specific questions and learn what can be changed. Would a larger down payment help out? Is personal debt reduction an option? Are there other loan programs that more closely fit your situation? You will want to understand specifically why the loan has been turned down.

Number Two: Make sure the lender is clear on your financial picture and any positive changes that might have occurred. Update the lender on things like a scheduled salary increase that will arrive shortly or any additional financial boosts you will receive, such as a bonus. When listing income, many borrowers fail to realize that an increase in pay that is coming within sixty days of closing can be included as part of the qualifying income.

Number Three: Let the lender know about any long-term debt that you have recently paid off and inquire if this might help you qualify for the loan.

Number Four: Can the loan be kept in house or what is called “In Portfolio.” This might result in greater loan flexibility since the loan would not be sold to an outside investor, which may require stricter underwriting guidelines than loans that are kept by the lender.

Number Five: Try another lender. If, after everything you have done the loan still comes out on the downside it could be that the lender you selected does not have policies in place with the flexibility you need. You can be helped in this search process by working with a mortgage broker who has more loan options available and works with a wide variety of lenders.

The bottom line is to remember is that lenders dislike saying no as much as you don’t want to hear it. By asking good questions and working with your real estate agent, a professional mortgage broker and the right lender you can turn that “No” into a “Yes” and start moving into your new home.

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