What to do when a loan application is denied

  • If your client's home loan application gets rejected, you can guide him or her to another financing option.

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The credit industry took quite a hit about 10 years ago. Leading up to around 2008, it seemed like anyone could get a home loan. Then the credit crisis shook the mortgage industry and suddenly it seemed no one could get a mortgage. Today, lenders have settled into a more traditional role and follow a set of common sense lending guidelines. While these guidelines have made it easier to get approved for loans, people still get turned down every day. Fortunately, there are other options for buyers who can’t qualify but still want to own a home. If you have clients in this situation, advise them of the following financing solutions. 1. Ask the sellers to finance the purchase Seller financing has long been a way for buyers to purchase a home they can’t quite get approved for. The sellers agree to a price and set the loan terms, just as a mortgage company would do. Sellers will want to know why they’re being asked to help finance the purchase, and your clients shou...