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Loan Options that Lender Will Not Tell You About

Loan Options Your Lender Will Not Tell You About

My Lender Said….

This is one of those times when I wish I had a bigger megaphone than this little website to let consumers know that your lender is not giving you the whole truth.

We get tens of thousands of visitors to this website every month.

The majority of our readers have told by a loan officer or a lender that their loan cannot be done.  Something didn’t sound right, so they do a google search, and land on Findmywayhome.com

There is no question that if we hear these stories from thousands, that there are tens, to hundreds of thousands of people all over the Country that are being misled, or given misinformation about their options when applying for a home loan.

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Consumers assume that if you call a lender that you are speaking with a professional that is experienced, and professional enough to research your questions before giving you an answer.

The truth is, there are many inexperienced and unprofessional employees that work for lenders that are trained to tell you what you want to hear, and not necessarily let you know that they don’t have enough experience to present you with an educated or informed response to your situation.

Ok, enough of the rant.  Let me explain.

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Not Necessarily Lying?

Let me back up a minute here.  I don’t want to give anyone the impression that there are a bunch of liars and crooks in the mortgage industry.  I don’t believe that at all.

I have lender friends all over the Country that completely respect and would trust with my Mom’s loan.

I don’t think that most loan officers will lie to you, but I do believe that they are afraid to tell you that they don’t know the answer to your question.

What is worse than a lie is not telling you that maybe “they” (the loan officer) do not have experience related to your question.  Maybe it’s also a case of they don’t know what they don’t know.

While there is nothing wrong with not having a lot of experience, implying that the answer they are offering is the right answer is almost unforgivable.

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Another common crime (in my opinion) is that the lender they work for does not offer a specific program, or they interpret an underwriting guideline in a certain way, and other lenders may not come to the same conclusion.

In both of these scenarios, the loan officer or lender will not hesitate to tell you that you cannot be helped, or that the one way they do it is the only option that you have.

Don’t Take My Word For It.

I have two very current and relevant topic examples where loan officers and lenders are not willing to tell you the truth, or even worse, commit to telling you that you cannot be helped at all.

Using IBR Payments for Qualifying for a Home Loan

This is a very hot topic right now.  If you have student loans, and your payments are based off your income, also known as IBR (Income Based Repayment), many lenders are telling borrowers that you have to use 1% of the balance as a payment when qualifying for a home loan.

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Let’s say you have $125,000 in student loans, and you have an income based payment of $45 a month.  This is not an unusual scenario at all.

If you call a lender, and they tell you that you cannot use your $45 a month payment, and that you must use 1% of the balance, a $1,250 payment is going to most likely make you unable to afford to buy a home.  At least that’s how it would look on paper.

The reality is, your payment is $45 a month, and that payment can only increase if you make more money.

Yes, we get thousands of questions and comments from folks all over the Country that are being told that you have to use 1% of the balance…when it’s simply NOT TRUE in most cases.

Don’t take my word for it, read the 100+ comments for yourself:

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Read:  Qualifying for a Mortgage With Income Based Repayment Student Loans

Home Loan after Bankruptcy, Foreclosure, Short Sale or Deed in Lieu

I’ve been covering this topic since 2011 and I have thousands of comments and questions from readers all over the Country that are being told all kinds of crazy things.

Find the Right Lender. Find the Right Loan. Get Help Now!

Most of the challenges with this specific topic is that there are so many different scenarios and variations on how these hardships occurred, and how long it took to recover from the financial challenges of the past.

I understand that it is highly unusual that I have logged the number of hours on this topic that I have.  My challenge is that inexperienced loan officers are out there telling folks that things are only one way, when there are 3 other options that they are not telling people about.

Don’t take my word for it, read over 1,900 comments for yourself:

Read: 2017 Buy Again After Bankruptcy, Short Sale, Foreclosure or DIL

Why Your Lender Will Not Tell You

If you take one thing away from this article, it’s that different loan officers and lenders have different levels of experience, and different interpretations of underwriting guidelines.

I can tell you from personal experience that what many people are told is impossible, is in fact possible.

What is impossible is knowing for sure that the loan officer you are speaking with, or the lender that they work for, actually knows what they are talking about, and if not, are they willing to encourage you to get a second, or third opinion.

I’ve been doing this for almost 2o years, and I learn something new every single day.  I read underwriting guidelines about a dozen times a day, every day for the past 2o years.

I share my experiences here, and thousands of people challenge me, and challenge my experience with questions, comments, and scenarios that I previously did not have experience with.

I will often introduce people to lender friends of mine that are better at a specific loan program, or have experience that far outweighs mine in certain situations where I am not an expert.

The loan option that your lender will not tell you about is the one that they don’t know about, or do not have experience with.

Exhausting All of Your Options

My hope is that if you are reading this, it inspires you to not take “No” for an answer, and to get a second, third, or even a fourth opinion.  Just because someone works for a lender, or a bank, does not mean that they know what the hell they are talking about.

Qualifying for a home mortgage loan is not usually black and white.  There are a lot of moving parts, and sometimes guidelines don’t make sense.

If there’s one thing that I’ve learned over the years is that there is always an answer.  You may not like the answer, and it might not make sense, but if you ask enough questions you will eventually gain enough perspective to know whether you are being given actual options and answers, or just the opinion of an inexperienced employee.

Need an Expert Opinion?

You can catch us most days taking questions through live chat on the lower right corner of this article, or answering questions in the comment section below.

Please feel free to ask any questions below, on chat, or by email.

This is a great opportunity for you to anonymously ask an experienced professional that has no financial interest in how how your question is answered.

About Your Expert

Scott Schang

As a 19 year veteran of the Mortgage and Real Estate industry, I am passionate about educating and empowering consumers. I have been writing about consumer protection issues, and making sense of complicated real estate and mortgage topics on this website since 2007

Leave a Question or Comment About this Topic

  • STEVEN KENDIS says:

    HI SCOTT, I APPLIED FPR A $200,000 HELOC WITH CHASE BANK. THE INT RATE WOULD BE 4.5%. ON THE LOAN, AT INT ONLY, THE PYM WOULD BE UNDER $900/MO. THEY SAID I DO NOT QUALIFY BECAUSE THE PYM IS CALCULATED AT 1% OF THE LOAN AMT WHICH WOULD BE $2000/MO. I WOULD QUALIFY AT UNDER $900/MO. HE SAID ALL BANK QUALIFY LOANS AT 1% OF THE EQUITY LINE. IS THIS CORRECT? STEVE KENDIS

    • Scott Schang says:

      I spoke to a friend of mine from Comerica Bank. They don’t use a 1% calculation for debt to income ratios, it’s .863% Not exactly what you wanted, but it is better than what Chase was telling you.

      Also, depending on other compensating factors, they may be able to make exceptions based on credit and LTV.

      I think the important thing to know here is that even though a loan officer at a different Bank told you that everyone uses 1%….well, we now know that is not exactly true.

      Thank you for asking questions, hope this helps?

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