Oftentimes Knoxville home buyers are successful at getting a loan with a different mortgage lender, many times several months later, after they have saved more money for a larger down payment or improved their credit score.
The key to being successful the 2nd time around is finding out why you were turned down in the first place.
The Equal Credit Opportunities Act requires lenders to give loan applicants specific reasons in writing, within 30 days of their decision. If the determining issue was based on a problem in your credit report, the lender must give you the name and address of the credit agency that provided the information.
Another option is finding out how close you came to being approved by talking to the loan officer with the institution that turned you down. The gap may be small enough to be remedied with a few thousand dollars more for the down payment, or a different home appraisal.
It may still be a good idea to talk to another Knoxville lender. An experienced Knoxville mortgage broker or banker can discuss alternative products and loans that are available from the Federal Housing Administration, which may require less stringent requirements.
Here in Knoxville we have quite a few credit unions that you may already be a member of or that you can join for a nominal fee. Knoxville credit unions sometimes offer better deals than a standard bank for their members; they might also modify loan terms for borrowers they already know, especially if they have worked with you already.
First-time buyers in Knoxville may have to take a closer look at their home requirements. One of the main reasons Knoxville buyers get turned down is that they try to buy more property than they can afford based on current income.
You should always be looking at ways to strengthen your financial picture.
“Buying a home is a long-term goal,” said Erin Lantz, the director of the Zillow Mortgage Marketplace. “It’s worth spending the time to invest and pay your bills on time.” Any errors found on your credit report should also be corrected, she said.
If your credit is less than stellar, “you have to re-establish 12 months’ of good credit, good payment terms,” said Gary DeTrano, a mortgage broker at the Walden Group in Mineola, N.Y. If your FICO score, for example, is 20 or 30 points below a bank’s requirement, you may be able to inch it up by paying down your credit-card balances, he pointed out. Just don’t use up the money you need for a down payment or closing costs.
Keep in mind that even Knoxville home buyers with steady income and good credit may not qualify today if they have big expenses.
If you are in the process of buying a Knoxville home and appying for a loan, you should take the time to learn about all the available loan options. A recent survey of prospective buyers conducted by Zillow found that 42% were unfamiliar with F.H.A. loan qualifications.
The moral of the story is that you need to educate yourself prior to jumping into the home search process, to be sure you have done everything possible to make yourself look the best you possibly can financially for the lenders. After you have done that learn about what loan options are available by talking with a qualified, trusted mortgage professional. Then when you are ready to apply, talk to more than one Knoxville lender and make them compete for your business.