Photo by Ivan Walsh via flickr creative commons.

Want to buy the adorable doll house with the white picket fence along a shaded street with sidewalks?  You have a steady job, good credit, a down payment?  Well not so fast, love, because you still might not get the home loan.  According to CNN.com, people are being denied loans even when they easily qualify,

Banks are reluctant to make loans without the Fannie and Freddie guarantee, and loans backed by them account for just about every mortgage written these days.

In 2009, the agencies lifted the minimum credit score that borrowers must have from 580 to 620. That’s probably for the best.

But they’ve pushed through a host of other requirements as well, and that means real estate deals don’t get done, even for some relatively low-risk borrowers.

Missed payments on credit cards, too few condos sold in the neighborhood, and vulture investors may share the blame. And the only solution is to apply somewhere else… maybe someone else will take the big step and allow people to purchase mortgage loans again.

Photo by Richard Gould via flickr creative commons.

Where claims are being filed up to midnight tonight with taxpayers rushing to meet the IRS deadline, I smell audits in the future of many people.  A government investigator said the IRS has paid millions of dollars in tax credits for first time home buyers – and many did not qualify for the money.

According to MSNBC.com,

Most of the money — about $326 million — went to more than 47,000 taxpayers who didn’t qualify as first-time homebuyers because there was evidence they had already owned homes, said the report by J. Russell George, the Treasury inspector general for tax administration. Other credits went to prison inmates, taxpayers who bought homes before the credit was enacted and people who did not actually buy homes.

The government is carefully looking at the report to see what money can be recovered.  And if the government can recover it, be assured they will.

Continuing a three year trend, the consumer continues to pay credit cards before they make mortgage payments, according to MSNBC.com. This demonstrates the drop in housing values and increase in the numbers of unemployed.

The persistence of the reversal shows that consumers don’t want to lose access to credit on their cards, especially if they depend on using them to make necessary purchases. “You can’t buy groceries with your house,” [Sean] Reardon said.

Further, because a credit card payment is so much lower than a house payment, it’s easier to make.  As the consumer remains cash strapped, the trend is expected to continue.

Photo by byrdiegyrl via Flickr Creative Commons.

Guest Article by Contributed by Debt Community Member, Debt Consolidation Florida

There are two principal types of loans which you can take out for the purpose of debt consolidation by using your home as collateral.

• By going for cash-out refinancing – If you want to opt for cash-out refinancing, you’d have to take out a refinance loan that is higher than your outstanding mortgage balance and replace the existing home loan with the new one. You pay off all your unsecured bills (such as, credit card bills, store card bills, etc.) with the extra amount. In this way, you actually replace all your existing unsecured bill payments along with your existing mortgage into a single monthly payment. However, before taking out such a home loan, calculate how much you need to pay in order to get rid of your unsecured bills, all at once. It will help you take out a cash-out refinance loan which will help you pay off all your debts. In this way, you can pay off your bills without having to get help from a debt consolidation company.

• By taking out a home equity loan – A home equity loan can also help you consolidate your unsecured debt. It is a type of second mortgage which you can obtain by pledging your home equity. So, you need to have sufficient equity in your home to borrow a significant amount by using it as collateral. The property serves as the security for the amount you borrow. By taking out a home equity loan, you pay off your unsecured bills and in turn, convert your unsecured balances into a secured loan. So, you need to make a single monthly payment towards paying off your home equity loan. Moreover, the interest rate on a home equity loan is much less than that on your credit card bills.

Whenever you replace your unsecured debts with a secured one, make sure you plan a budget and make your single monthly payments on time, so that you can pay off the home loan within the stipulated time period. This is because the lender can foreclose your property if you’re delinquent on your monthly payments. So, before taking out such loans, analyze your financial condition and to be sure you’d be able to pay back the loan on time. If required, take help of a financial adviser to know which debt consolidation option will be best suitable to you.

For more information, contact Mr. Parker at kenneth.parkar83 (at) gmail (dot) com.

Even the best real estate agents and loan officers can get tripped up in this new reality of home loans.  After careful inspection of loan documents – verifying credit scores, job length, salary, and other financial information – sometimes buyers are still being told “No” by underwriters.

A preapproval letter may not be enough for sellers these days.  But what else is there?  Real estate agent Lori Cain of Tulsa asked the question on her Active Rain blog and some of the answers were outstanding.

Try and stay away from the big, national, retail banks whenever possible.  When you do get a pre-approval letter, call the person who signed the letter and find out what they have done to validate their borrowers qualifications and ability to get a loan.  If there is no name or contact info on the letter – HUGE RED FLAG!!! – Donna Knudson

and

I have also learned that 99% of the loan officers are not qualified to give an accurate answer.  If a buyer has a PQ with someone, I make them do another one with a pro that I trust,  If I get resistance, I do not work with them.  Solid buyers never have a problem…

I do not do mortgages, but I understand them.  I ask a LOT of direct questions and don’t let the buyer dance around an answer.  if anything sound iffy, I make the buyer start the mortgage and go through the credit, employment and all verification portion of the mortgage process before I will put them in my car. – Buyers Broker of Florida

Good answers… go read  more on Lori Cain’s post!