we were Denied....again

Creative Real Estate Financing Forum 32 Replies

well.... we just got denied for another loan...DTI ratio too high for me and my hubby. I'm starting to get discouraged. I wish I would have found this site years ago or read rich dad poor dad. Too many credit cards...in too deep and trying to get out but stuck in the "rat race". Still not giving up but hoping I catch a break soon. We found a great deal and now have no way to finance it.

@Nicole Frawley can you buy with hard money or private money or finance it with a partner that is qualified? 

Medium crossley property group logoApril Crossley, Crossley Properties, LLC

Call the credit card company and ask for a discount or reduction. I'm assuming you have some capital saved up to put down on the new place... apply it to your debt. 

Now, if you go the reduction/discount route check to see if/how it'll impact credit scores.

Try putting under contract and wholesaling it to make some cash. You would put it under contract and then assign the contract to another investor. Look at local meetups, or this site for someone in your area.

Originally posted by @Nicole Frawley :

well.... we just got denied for another loan...DTI ratio too high for me and my hubby. I'm starting to get discouraged. I wish I would have found this site years ago or read rich dad poor dad. Too many credit cards...in too deep and trying to get out but stuck in the "rat race". Still not giving up but hoping I catch a break soon. We found a great deal and now have no way to finance it.

 We had the same problem starting out. Merge all your debt into one person.

My wife has the better credit and better W2 job. So we concentrated on paying off the debt in her name first, and I even used some of my own line of credit, credit cards, etc to help pay some of hers. 

That allowed us to purchase property in her name and get started.

Originally posted by @Derek E. :
Originally posted by @Nicole Frawley:

well.... we just got denied for another loan...DTI ratio too high for me and my hubby. I'm starting to get discouraged. I wish I would have found this site years ago or read rich dad poor dad. Too many credit cards...in too deep and trying to get out but stuck in the "rat race". Still not giving up but hoping I catch a break soon. We found a great deal and now have no way to finance it.

 We had the same problem starting out. Merge all your debt into one person.

My wife has the better credit and better W2 job. So we concentrated on paying off the debt in her name first, and I even used some of my own line of credit, credit cards, etc to help pay some of hers. 

That allowed us to purchase property in her name and get started.

 Just confirming that this can indeed work. :)

Medium logo behlChris Mason, Bay Equity Home Loans | [email protected] | 415‑846‑9211 | https://www.bayequityhomeloans.com/chris-mason | CA Lender # 1220177

Were selling some things we dont need..such as the hot tub thag was here when i bought my current home..obviously before i knew about investing and a slew of of other things to raise capital. :) 

Hi! I'm a newbie here, but in the same boat. My DTI was considered too high. I applied through a federal credit union to purchase a home and was denied. My credit is okay, no missed payments and good references didn't mean a thing. The only thing on my credit report are student loans. I went to college hoping for an opportunity to make a better life and student loan debt has hindered me from doing the one thing I really want to do: purchasing a home. Go figure.

Not sure if this applies, but have you heard of owner financing?

Sometimes losing a deal can just mean that you need to take a step back and get your finances in better order. Do you have any high priced vehicle loans that you could dump quickly? We bought our primary residence after basically turning over our truck to the dealer to eliminate the loan and lower our DTI. Remember there will always be another deal out there. I hope it works out for you.

If you get denied by one lender (or approved for that matter) the rest will do the same.

Vanilla generic lenders don't make decisions. They just do confirming loans. You conform or you don't.

If it makes you fell better, I don't "conform" either and will do ~$25m in lending this year.

Skip to commercial. Terms like "DTI" drive me nuts when I'm buying a property that's going to increase my "I" more than my "D"

i dont have a 20% downpayment yet or i wouldgo commercial. So much easier. Were thinking of saving up and buying with a 203k loan through fha. It requires 3% down of purchase price plus rehab costs. But dti has to be 50% or lower. 

We both have hogh vehicle payments. But currently im a home health nurse so i have to have a reliabke vehicle plus the way my loan was with "taxes and tags" i now owe 15000 still on a car only worth 9000 or so. NEVER BUY A NEW CAR FROM A DEALER. 

Owner financing would be amazing however i feel like the realtors in my area arent exoerienced with this so dont even end up asking the seller. If i met up with the realtor and wrote an offer with owner financing she would have to show it to them correct?

for an FHA you have to live in the property. So if its a single family, its not really an investment. Min for investment mortgage is 15%.

I'm not entirely sure, but yes, I believe the realtor would have to show the seller. My only concern with that is would the realtor be willing since it could affect their commission? I mean, im sure they'd still get one if the home sold at the price they were asking, but it would be over time unless you found an investor who would buy the house with cash for you and you pay the investor back. Just brainstorming here. I'm interested in knowing if that could work. 

Definitely don't give up! I believe there is a way. I'm interested in learning about more options that don't really involve the banks. 

The realtor still gets paid thats why you have to give a down payment when you do owner financing. 

Also fha yes you have to live in it however the house im looking at we would offer 42000 have 20000 for rehab and arv is 90000 or higher in that neighborhood. If it werent to sell we could easily rent it out for 1000 or more. Home is listed for 49000 however has been on the market a while. So we planned to live there a year sell it take profit for a down payment on the next one hopefully a duplex or higher.

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ive never had a bankruptcy. Quite a bit of debt though. 

@ Nicole frawley

Anyone buried in debt is because he spends too much relative to his income...

For now, you should completely forget about investing, and work on your debt issue first ...

Start with your income, carve out what you have to pay for debt, then carve out what you want to save.... Then create a budget based on what is left.....every time you are about to spend money, pull up that budget and see if you still have room there.... if not, don't spend.....

That is a lifelong skill everyone needs....

If you can do this for 3 years, I guarantee you will be able to afford RE again

Do a Goggle search for the Dave Ramsey program. Great program. He does a daily talk show. It's in the top 5 shows. I teach it from time to time.

Get your financial house in order first.

Someone mentioned contacting card companies to reduce debit --- Noooooooo!

If they report that as a settled account, you ability to get traditional credit may be shut down for 5-7 years.

I can tell you, every house purchase is a financial surprise. If you are cash poor, then it's CC's to repair the rental house.

Then you are on the Money Go Round again!

I was penned to the wall financially in the early/mid 90's. I backed up, got our financial house in order, then moved forward!

You can make this happen girl.

If a mortgage on a 42k property puts you over 50% DTI then you have way too much debt to be worrying about REI at this point. Pay down the cards and build an emergency fund and then start REI.

Originally posted by @Eric C. :

If a mortgage on a 42k property puts you over 50% DTI then you have way too much debt to be worrying about REI at this point. Pay down the cards and build an emergency fund and then start REI.

Very true. 

Maybe i should explain more everyone. I already own my current home through the usda. I also own a home that i am selling rent to own...bad deal for sure. Either way my fiance was the one who went for the loan. He only makes 15$ am hour amd had a truck loan and a few credit cards. He got denied. I cannot get another usda loan because i own the house already amd were hoping to rent it out when we move. Also my dti would be fine im a registered nurse however the fha doesnt allow you to use rent as income to offset debt. So i would have to sell my current home rather thab renting it out or have my dti be 50% with 2 house payments which the fha loan officer says is close. Even though i would be making 200 on cash flow after all expenses on this property none of it would count so the entire 845 house payment would count as a debt. But...i am currently selling some items we dont need to pay down credit card debts etc. Also does anyone reccomend consolidating debt on credit cards etc?

@ Nicole Frawley  You said car payments high and I know you need reliable transportation for work but what about trading your cars in for ones with lower payments and lower price but still relatively new. That would reduce your debt some or even buy a good used car for cash temporarily just to get the car loans off until you get a loan. You can always get another car loan after. Car loans are much easier than home loans.

Also, maybe pay down the mortage on the home you currently own? You said your close to the 50% so If you can just get something down even temporarily until you can qualify. Also, if you do get an approval don't buy anything or open any new credit cards until it closes escrow. I've heard of people who have been approved loosing their financing right before close because they bought something on credit or opened a new credit card.

If all else fails, you can look into owner financing but if your looking to flip owner financing usually doesn't offer enough equity for that but if you want it to live in yourself or rent it out for long term it could be a way to get another property without traditional financing. 

You can  talk to owners yourself, and just ask if they would consider it, worse they can do it say no. 

last i checked i couldnt trade my car in unless i was buying a more expensive car thats ehat the dealer told me...does anyone knoq how to do that for sure?