Even though you’re putting 20% down and have excellent credit, you may find it tough to get a loan. Really? Yes.
Here’s what I’ve found out…if you have student loans, even if they are deferred for more than 12 months, that may be calculated into your debt to income ratio.
“But Anne-Marie,” you might be saying, “my student loans aren’t due until 2015.” That’s nice, but no soup for you. This is the unfortunate case of over correcting the loan industry that used to be so lax you only needed to state your income (as if pulling a number out of thin air) to get qualified for a loan. Now, the ever-changing, stricter guidelines make it difficult for strong, qualified buyers to get a decent loan, or get a loan at all. The lending guidelines change so rapidly that’s it’s very difficult to keep track of how things are changing.
It’s like going down white water rapids…you’ve maybe gone down these rapids before, but no ride is ever the same…it’s always changing and you have to be on high alert to adapt and adjust to anything that may be thrown at you.
You could also be a self-employed buyer and run into the same thing. When lenders hear “self-employed” it’s like you just turned on the fire alarm…everything is beeping and honing in on you with flashing lights and rifles pointed – “hands up!”. You could make $250,000 every year for the past five years…but if you’re self-employed, it’s not so impressive. I’m constantly watching my head spin as my wonderfully qualified buyers struggle to get a loan. While we are in a buyer’s market, we’re also in the market of banks having been burned…albeit at their own hand, but now banks aren’t so willing to put that same hand out with a wad of cash. They hide it behind their back and ask for every bit of information you have, short of a DNA sample, before they (reluctantly) give you a loan.
This is why having a Top Realtor, is super important! As well as a top lender or mortgage broker who can anticipate the change and steer you clearly and safely into your new loan product. And if a new home is now the answer, you’ve got a Realtor on your side who can quickly identify a new property for you and a lender who can get you a desirable loan product.
Is it possible to get a loan if you’re self-employed or have student loans? Absolutely! And being guided down that path by true professionals will help you get the home of your dreams and a loan you can live with.