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What would cause one mortgage lender to turn us down but another to say we qualify, when they have the same info?

We've been trying to get a mortgage loan. We were told last fall by one lender that we qualified for an FHA loan, but when we went to get pre-approved (at a different lender), we were told that our credit scores didn't meet the NEW guidelines, and we were turned down. But the first lender still says we qualify. I'm truly confused. FHA guidelines are universal - they are set by the government. So, why would one lender say we qualify when another lender says we don't? Neither of our lenders will give us a straight answer on this, and I'm wondering if the one who says we qualify is just leading us on... Any thoughts?

Answer Question

Asked by Anonymous at 4:26 PM on Mar. 3, 2010 in Money & Work

Answers (4)
  • there are new guidelines on credit score so you may want to check that out. There are also more changes coming if your score is between 580-620. Some lenders have their own guidelines to cover against risk so they may not do something another would on the exact same program.

    Answer by Kari126 at 5:22 PM on Mar. 3, 2010

  • A few years ago we were denied for a mortgage by my bank at that time. But we went immediately and applied for a mortgage through a regular mortgage company - and were approved. Different places can have their own internal rules too - one could want your scores better than the national average. Or, the first one sees you as an easy target - they see you not making your payments and possibly getting more money out of you buy needing to foreclose down the line or something. Some places are just more lenient. You're not going to get a straight answer because they won't reveal their "secrets", and it's hard for us to tell you why it is the way it is.

    Answer by Anonymous at 5:38 PM on Mar. 3, 2010

  • Even though FHA loan rules are universal, mortgage rules are not. Banks, savings and loans, mortgage brokers and credit unions all have different rules and programs they are allowed to use. The easiest to get a loan through is probably a credit union but you have to be a member. Good luck w/ your new home.

    Answer by CorrinaWithrow at 6:55 PM on Mar. 3, 2010

  • Like a PP said, different banks have their own rating systems.
    Plus it's possible that the 2nd place gave you a higher interest so they were willing to take the risk of loaning you the money because there is a higher rate of return.

    Also they could just be sub-prime lenders.
    But if you did the research and you feel like you can afford the home, maintance, PMI insurance (if applicable), property taxes, and home owners insurance... then by all means, go get your home.

    Answer by Anonymous at 7:16 PM on Mar. 3, 2010

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