Why can I not get a loan as a firts time home buyer ?

Question

Why can't I obtain a loan from a bank or morgage company ? They say that you can have good credit or bad, But I guess they are only looking for reallllllllly good A+1 credit score.

Answer 1

I work for Country wide home loans as a Mortgage Broker.

The banks look at 4 main aspects when you apply for a loan.

#1 INCOME
#2 OVERALL CREDIT
#3 EQUITY
#4 MORTGAGE HISTORY

As a first time home buyer, the most important things are your INCOME and your OVERALL CREDIT HISTORY.

Your credit history is based on how many times you've payed bills ontime or late and also how many different types of credit you've been granted such as car loans or credit cards.
Your credit score ranges from abot 400 - 800 when you're dealing with a home purchase.

If you are in the 400's or 500's, NOBODY WILL GIVE YOU
SH!T...
If you are in the 700's or 800's, you can get a house with almost $0 out of pocket.

700 fical score is A...higher than 750 is A+. 800 is A++
680 is a B-
580 - 650 is c- and below that is all D's and F's

The PRIME banks like Washington Mutual, HSBC and Chase look at credit scores above 680 for people who want to buy a house mostly because if you have good credit, you are considered less of a risk.

SUBPRIME BANKS (ones you've never even heard of) are usually willing to take Ficals around 580 and above simply because they need the money and are competing with the PRIME banks.


Also keep in mind that banks will take advantage of people with below B credit simply because they can. If your credit is in the C's and below, you might be able to get a mortgage but at a TERRIBLE interest rate.
PRIME banks tend to deal with B credit and better and offer better rates because they don't want to bother with people who have poor credit.



Your income is also very important.
Basically, your INCOME is based on your DEBT TO INCOME RATIO... (DTI).
If you make $50,000 a year, but have to spend more than 50% of your income on debts...you are considered a high risk. Most banks will not grant you a mortgage if you yave a DTI higher than 55%. Some will go as high as 70% though. if you have spectacular credit.




Equity basically means the APPRAISED VALUE OF THE HOUSE - the BALANCE ON THE MORTGAGE. Equity only applies in this sense if you allready own a house and need to refinance it.
The EQUITY of the house if your a 1st time buyer applies to the amount the house costs. If the house is $300,000 and you have no cash to put down on it, your LOAN TO VALUE is 100% because you need a loan for 100% of the cost.

We will forget Mortgage History, because if you don't own a house, you have no mortgage.

Most Banks will be certain that if they are giving you 100% of the cost, you have EXCELLENT INCOME and EXCELLENT CREDIT.

I am not sure what your credit history is, or what the amount of the house you want is, but if you have questions, you can email me at [e-mail].


It is better to work with a mortgage Broker than a bank because a broker has the ability to shop around with different banks. Some well known banks such as Washington Mutual and some banks you've never even heard of such as First Continental.
Brokers run your credit ONCE and use your fical scores to find a mortgage. If you go from bank to bank trying to get approved, you end up driving your credit score down because the banks want to make sure you are never applied for a mortgage based on your history.


If your credit is bad (below 600), don't even think of buying a house cause it will only hurt you in the long run. I suggest you buy a used car (or a new one) keep up all the payments on time and after a year your credit score will rise nicely. Then once your scores are high enough, you'll be able to get a good mortgage at a low interest rate.

Answer 2

Age, credit score, employment history, marital status -- a lot of things. I am married, 25 and employed for 1+ yr. My credit score was in the 700s. I just bought my first home in June. I would have to say credit score probably had the most to due with it -- get your credit rating, see what your credit to debt ratio is (this will probably give you a better idea as to what you look like to lenders). I was actually more desireable than my 35 year old husband who was left off of the loan. Just do some reasearch. Check out fanniemae.com -- it's where I started researching when I wanted to buy a house.

Answer 3

The banks near me will only loan to a dual income family. First home buyers are basically screwed unless you want to live in a box. My sister has a lot of savings, perfect credit history, and a great, stable, high earning job, and the bank will hardly loan her anything until she co-borrows with a guy. Guess we all just have to hope some relative becomes rich then dies and gives us a big cut in the will. Wishful thinking hey?!

Answer 4

Your going to the wrong place my friend, as long as you credit score is above 500, which is extremely low by the way, I know a company that can help you out. It's called New Line Financial. They deal with the worst credit and first time buyers as well.

Answer 5

Credit rating isn't the only factor for obtaining a mortgage. They also look at job history, present income, and present debt. The debt will also include credit cards that are open and have a zero balance.

A good mortgage broker will take the time to explain what you need to do in order to qualify for a loan.

Good luck!

Answer 6

Not true. My fiance just got a first time home buyer loan for about $100,000. His credit score was about 620.

Answer 7

Your credit score is a big factor as well as the amount of money you are wanting to be financed for vs the money you have for a down payment.

Answer 8

It most be because you're a minority. these companies don't care if you pay on time on your revolving accounts or have a good credit report with a high FICO score. They make early determinations based on the color of your skin.

Answer 9

It depends on a lot of factors: How much you want to borrow, how much you are putting down on the house, your income, your assets, your liabilities and your credit score/history. Keep shopping around. Good luck.

Answer 10

You need:

1. Good credit
2. Proof that you have enough money to pay them back in the future (like a decent job that you've held for a while).