Veteran Loans with a credit score under 620?
original article posted at www.woodbridgemortgagenews.com |
| Roadmap to Good Credit |
In late August 2010, Mr.Buyer was referred to me by an agent to get pre approved. But this was not a ready to go client. We provided the client a detailed roadmap to
get mortgage ready in the next six months.Many times we do this (you know give the buyer a chance to participate in their own rescue), but when we check-in a couple months later via phone the buyers have not done anything to change their situation.
Well this client was different he did everything we asked and had greatly improved his credit score
I asked the buyer if he was going to work with the Agent that originally referred him and he decided not to. According to the buyer, the agent did not keep in touch and one of his friends had a great experience with another Realtor that he wanted to work with as well.
I immediately asked for the Agent's information since we had never worked together, I sent him an email and left a voice mail to introduce myself and let him know I would be working diligently on the team. As a lender I am aware that you, Mr. or Ms. Agent, are putting the biggest part of the transaction in my hands. So I try to communicate quickly with agents that I have never worked with to start establishing a working relationship.
After house hunting and receiving an accepted offer from the seller with my pre-approval letter, the agent goes on to explain to the buyer he feels he would be better off with his lender. The buyer called me and asked why his Realtor would state that and I told him because most people like to do business with people they know, like and trust. And rightfully so, at this time I am none of those to your Realtor.
I then call and leave another voicemail for the agent to let him know that we are going to do the best job for Mr. H, and that he can count on me to get the loan to closing and to communicate throughout the process.
Shortly after the signed contract addendums returned from the bank, the agent sends the client rate quotes via email from his preferred guy and pressures the client again to go with his lender. At this point I am not to happy with the way this transaction is starting, so I call the agent yet again and politely ask what he needs from us to move forward with confidence . He goes on to give me some speech about doing the best for the buyer. But the buyer has clearly stated, to me anyway, he is very pleased with our services and sees no need to switch lenders.
Anyway, after providing two good faith estimates with the buyers rate lock options, Mr. Realtor again tells the buyer he could get a lower rate with his lender and he really thinks he should switch. I am trying at this point not to take this personally, but I was a little frustrated as I knew it was my roadmap to credit recovery, the buyers willingness to take action, and our ability to stay connected that led to the buyer even being able to look at homes with Mr. Realtor, let alone submit a contract.
I placed one more call to the agent to say I appreciate you looking out for the best interest of the client but the information you are giving him is not taking into account this buyer's overall financial scenario. But had you called me back earlier, you would've understood that not only do we have skin in the game but we also are providing a loan to a client who otherwise may not be approved. (Which I am sure made him somewhat uncomfortable, and he probably hears that line all the time.)
I then explained we do VA loans and FHA loans for buyers with less than 620 score ( there are not many lenders that still write these loans) but as a result the interest rate is typically an .125 to .250 higher than market....I am sure some would cry foul on this, but it is what it is. This information had been explained upfront to Mr. H and he was given the opportunity to continue working to raise his credit score above 620 or move forward with buying now. And of course he chose the latter, Mr. H had paid his dues by correcting his past credit mistakes, had great debt to income ratios, and a clean rental history. So sitting on the sidelines was no longer an option, buying at .125 higher rate was still cheaper than renting in his case.
Anyway I politely asked Mr. Realtor, "Will your preferred lender do a VA loan for a buyer with a credit score under 620?" Nope, just as I thought. Even with the added pressure by his agent the buyer did remain loyal and I am very pleased to close the loan.
It's always nice when a plan comes together!
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