Can't qualify for mortgage? Think again

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When I was a kid, my mom used to read me “The Little Engine that Could.” I couldn’t get enough of it. I asked her to read it over and over, and she did, mostly because she knew it was teaching me that positivity and hard work lead to accomplishment.

Many homeowners wishing to save money by refinancing and those wanting to purchase a home — especially those who don’t think they qualify — would be wise to consider this timeless classic the next time they talk to a mortgage lender.

I can’t tell you the number of times I’ve heard, “I don’t think I will qualify,” because of this or because of that. Thinking you can or thinking you can’t may have significant consequences.

A friend has been talking about buying a house for the past five years, but he never moved forward because of a bankruptcy on his record. He thought this made him unfinancable. I told him he can qualify with a government loan, such as FHA, VA or USDA, for example, after the bankruptcy is only 2-years-old (and in some cases only a year).

But he always said he didn’t even want to take the chance of being declined, even though there was already no chance he would be declined.

He finally bought a house this summer after the 10-year-old bankruptcy fell off his credit record. But during the time he took thinking he couldn’t, he paid more than $100,000 in rent to his landlord — money that could have gone toward his mortgage.

For those who think they can’t refinance their upside-down mortgage after the housing market crashed, consider a Clark County client of a mortgage advisor I’m associated with.

The client bought a house at the top of the bubble, and even though he always made payments on time and paid down on the principal, after the bubble burst he was told any refinancing wouldn’t be worth the time or effort.

He reached out to the mortgage advisor and they researched government programs that might help. The client qualified for the Home Affordable Refinance Program, and he and the advisor were able to reduce his 30-year mortgage to 20 years with the same monthly payments.

Contrary to the beliefs of the folks in the “I think I can’t” camp, mortgage loan guidelines are not more difficult than they’ve ever been. They’re actually very similar to the way they were 20 years ago. Back then, everything about a client file needed to be documented.

Applying that approach in today’s mortgage world can mean the difference in getting a loan or not.

Mortgage advisors can determine whether sources of down payment and credit issues need special attention and help eliminate the possibility of delaying the loan process by working with clients to develop detailed documentation.

Remember “The Little Engine that Could” the next time you think you can’t qualify for a mortgage or refinancing. Look for a mortgage lender who is willing to go the extra mile to navigate that mortgage-lending mountain. A little hard work and positivity is all it takes to get you up and over and into your new home.

Gabe Terreson, branch manager of Home Team Funding, is a 17-year industry veteran who conducts training for mortgage consumers and real estate brokers. He can be reached at 360-993-5800, via email at team@hometeamfunding.com or online at www.hometeamfunding.com.

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