Can't Get Approved, Is Quickenloans Taking Advantage

[Sean Forner]

My father and I have found two rental properties that we are trying to purchase and rent out to college students. One property is listed at $50,000 and the other at $58,000. We are going to have a 25% down payment. I have a 720 credit score and my father has a 760. His income is $136,000 and I am about to accept a job offer (just graduated from college). Quickenloans is saying that we will get approval only if we purchase the homes for $67,000 each. This is ridiculous!!! They are saying that with closing costs we exceed the 5% Federal predatory lending rule and by increasing what we pay on the homes by nearly 20% we get around the rule.

Help please! These properties are great and we have everything ready to go accept for pre-approval. My father and I have no idea how we aren't qualifying and feel like we're getting taken advantage of.

[Chris Mason]

Compliance stuff starts to get hard for loan amounts below $100k, and very very hard for loan amounts below $50k. 

Honestly, for you as a borrower, the fixed closing costs make it not worth it to get a traditional mortgage. It's only $50k. Whatever will have the lowest closing costs will objectively be the best deal, not what has the best interest rate. Credit card. Hard money. HELOC on your primary.

If you really want to push and get a mortgage, assuming the property is in Maryland, google search "poorest zip code in Maryland" and find out who is doing those mortgages.