I have friends that are considering buying a new home. They own about $535,000 worth of rental property and they also have a successful business. She just began receiving her pension, and he has another 3k in addition to the 8k he brings in every month.
They have an averaged credit score of 849. They also have around 400k in other holdings. They are doing okay for themselves, but want a different house. That's not going to happen.
Shawn McCardle and the brilliant crack-team of financial geniuses at Summit Mortgage just told my friends that they don't have enough income to qualify for a preapproval mortgage. Not only do they not have enough income, but now, because they cannot get a pre-approval letter, that shuts down about 75% of the realtors from even showing them a house.
I get that a realtor doesn't want to waste their time with lookie-loos that cannot ever dream of buying the house that they are looking at-but I also have former deadbeat tenants that were able to get pre-approved with credit scores that were 30% lower, and income that was 75% lower. So is it an age thing? Are the new financing rules (that no one will explain) that much more stringent? How in the world is anyone getting pre-approved?
I guess part of it is that they are both self-employed, but they are both successfully self-employed. But a person that manages a McDonald's is a better risk than a couple with a million dollars in assets? That just doesn't make any sense to me.
I am hoping that some banking wizard will read this and explain it to me. Because while I don't want another instance where people can use their unemployment as collateral to buy a house (thanks again Bill Clinton) I would also like to understand how a couple that is obviously able to afford a home unable to get a mortgage.
Think about it, you'll thank me later.
