Thursday, October 2nd, 2014

How To “Not” Get That Home Loan

Some things in life are just so unbelievable that they merit being re-told. One of the surest ways to “not” get the home loan or referral that you are looking for is to tell the potential lender (or referrer) a sob story that details what horrible credit you have. Susan of The Investor Insights tells one such story:

Hi:
I am in a tough situation. My sister helped me out to buy my home here in CT. A bank foreclosure that we got a hardmoney loan for. We had to do a gut rehab as the place was completely trashed. The title is in an LLC and my sister’s name. The plan was for my wife to finance the property with a regular mortgage when the rehab was done. We are having a hard time finding a loan so we asked the hardmoney lender for an extension on the loan. He wanted my wife’s financials which she refused to give to him since she was not a party to the original loan. We did not have a good relationship with this lender during the rehab. He decided to withhold the final draw that we needed to complete the rehab. Since we could not afford to pay him and continue making payments on the loan – we just chose to finish the house out of pocket. Needless to say the lender filed for foreclose which has totally messed up our efforts to cash him out. Though my wife has been pre-qualifed by a least three different lenders – they will not make the loan because of the family connections (they cannot sell the loan). I need to find a solution quickly or lose this home. Can you give me some guidance or direct me to a funding source? Thanks.

Susan goes on to summarize the situation and gives you tips on what you need to do to convince lenders to give you loans in her post TMI! How Oversharing Can Kill Your Loan.

Just remember, if you want something from someone else, you will almost always have to convince them of how it will benefit them if they give it to you. Getting a home loan isn’t much different from selling, you have to convince the lender that you are worthy of a loan, and that they will be paid back (e.g. they will make money) from the deal. Focus on the benefits for them, not you.

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