WHAT TO DO IF YOU'VE BEEN DENIED A HOME LOAN
Here's what to do if you've been turned down for a home loan for credit reasons:
First, ask your lender for a copy of your Residential Mortgage Credit Report which is a compilation of your personal credit
profile for past seven years issued by a credit bureau. After you see your report you then ask the credit bureau for a
reinvestigation of any negative marks on your report. The bureau will provide a form for you to use to ask for the reinvestigation.
After you fill out and submit your new form the credit bureau has 30 days to investigate your claim and change your report. If you are correct and the negative mark was a mistake or if the negative mark can no longer be verified the credit bureau must remove that information from your report. Sometimes (occasionally, rarely) credit bureaus will remove items if checking the item is more trouble than it is worth.
If the information on the report is correct and the bad mark is legitimate check the date. If the negative entry is older than seven years the credit bureau will take it off of your report. Many times the credit bureaus are lax with keeping up with the removal of old entries.
It could take weeks or even months to clear up a credit problem. You might be able to propose a counter offer that that the lender may appreciate. For example, if you were turned down for an 80% loan because of credit issues, the lender might be willing to loan you 70% of the home's purchase price instead of 80%. In other words, you might get your loan if you can come up with more money up front. Lenders might be more likely to reconsider your approval if you can pay more up front in fees or if you are willing to accept a higher interest rate.
If you are turned down for a home loan you can easily utilize the free information on this website and spend a little time fixing the problems that are on your reports once and for all. Remember, a turn down is not the end of the world and you can overcome the situation.
Good luck and happy house hunting!
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