Quote:
Originally Posted by LavrentiBeria
Can you be specific? I heard it is 15% down + credit score > 700. That's not absurd, but reasonable.
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If qualifying for loans was based only on a credit score and a down payment requirement, you’d be 100% correct. Here are a few examples of what I refer to as absurdity:
A – Appraisals. Back in the “old days” (i.e. – a year ago) an underwriter would have an appraisal go through a formal appraisal ‘review’ if it looked suspicious. Today, virtually every appraisal is submitted for appraisal review and lenders are frequently coming back with LOWER values than those submitted by certified appraisers. This is commonplace and, clearly, a showstopper.
B – Mortgage insurance. The cost of MI has skyrocketed. MI companies have also placed minimum credit score requirements for buyers, above & beyond what the lenders mandate. In other words, you may have a 680 score and qualify for a loan with a 675 credit requirement and then, ultimately, fail to get the mortgage because the MI score (minimum) requirement came back at 700.
C – Changing guidelines. This is the worst culprit. You may be working with a buyer and have them pre-qualified and ready to go with a specific loan program through a particular bank. Let’s assume one of the guidelines was that the buyer needed 3 months of reserves to qualify. Your buyer may fit that criteria and literally, 1 week before the closing date, the bank changes the reserve requirement from 3 to 5 months. Bam !!!!! Your deal just fell apart. That’s just one example and it happens with virtually every file.
It’s fucking Thunderdome !!