Rates are lower today. Operation Twist was announced by the Fed. They plan to shift $400B in holdings to boost economy. Stocks, oil, and gold dropped. Bonds are up. Comparison mortgage rates with no lender fees are 4.0% on a 30 year, 3.25% on a 15 year and 2.75% on a 5/1 ARM. Click here for more details.

Facebook unveiled major changes today. Let me know what you think over at the Rates in Motion page. (I think it looks cluttered)

To help out my Realtor friends who can’t get their buyers approved for a mortgage, I put together seven situations where finding another lender might make the difference.

The magic is all in today’s episode:


(Watch it on your mobile phone or email reader here)

Check out this article if you want to know how Facebook’s new updates work.

With today’s underwriting guidelines, it doesn’t take much have your mortgage application denied. However, just because one lender denies you when your debt to income ratio is over 45%, doesn’t mean another lender doesn’t specialize in those loans.

Here are seven scenarios where some mortgage lenders would deny you a loan, but others will accept you with open arms:

1. 600 credit score

A lot of mortgage lenders will immediately deny a borrower with this score. I know several FHA lenders that work with this credit score, and some will even go as low as 580. They will require some additional underwriting, but it’s available if you look hard enough.

2. 95% Loan to Value with no PMI

That’s right; you can buy a house with 5% down and no PMI. You will most likely have a higher rate, but it is still a possibility. Some lenders just don’t have access to this product, so it may take some searching.

3. FHA loans with a non-occupying cosigner

Some lenders will turn down a FHA loan when the borrower does not have income, but parents are willing to cosign. If the borrower doesn’t have the ability to pay on their own, some lenders will deny this type of loan. However, this is not an FHA guideline and there are some lenders that will have no problem with it.

4. Small loan amounts

Some lenders set minimum loan amounts. If you need a $49,000 loan you may be turned down because many lenders have a minimum loan amount of $50,000. $1,000 may be the difference between being approved and denied.

5. Manual underwriting

A “manual underwrite” simply means that the underwriter must go through your file by hand rather than rely on just a computer. It is still credit based. In fact, the rules are often more strict than an automated underwrite. Some lenders are willing to do manual underwrites, but others are not. This may be the difference between an approval or denial.

6. One 30 day late payment

If you were 30 days late on your mortgage payment in the past year you will be denied by some lenders. Other lenders don’t care.

7. Paying off debt to lower your debt ratio

This can be a big issue with most lenders. There are a few lenders that will allow it with some extra documentation.

When you need a mortgage that is unique or outside a lender’s guidelines, don’t give up!

Keep trying until you find a lender that has the loan product you need. The biggest misconception is that all lenders are the same, and if one turns you down all lenders will.

That isn’t the case. It’s actually the exact opposite. All lenders are unique and have their own level of risk. Find one that is willing to help with your mortgage!

If you thought this was good information or worth discussing, help me bring transparency to mortgage lending by sharing today’s episode on Facebook or Twitter.

Let’s change the way people shop for a mortgageā€¦forever!

– Mike

PS. To ask a question, get advice, or find out if you’re getting the best deal possible on your loan, just post a comment below. Daily comparison rates, calculators, and other cool features are available in the free Rates in Motion LoanApp by going to your smart phone and clicking on this link, activation code is 9203780002

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