denied for a home equity loan - Posted by Stacey

Posted by Shaun on February 27, 2006 at 20:56:13:

Talk to a good broker. Where are you located? With 700 scores, You should be fixed in the 7s for 20 years. Or you can try an interest only. Even if your debt-to-income is too high, you can go stated with a 680 score and have the same exact fixed rates as if it were full doc.

denied for a home equity loan - Posted by Stacey

Posted by Stacey on February 27, 2006 at 12:00:57:

I am completely baffled. I wanted to refi my existing home equity line of credit through a local bank with a fixed 3.99% int for the first 6 months and then prime minus 1/2 for the next 10 years. I have $250k equity in my house, and my husband and I both have low 700 credit scores. Why was I denied??? The loan officer said it was based on income - which doesn’t make sense for two reasons. 1 - its a home equity line of credit and 2 - we both have good income (our salaries plus an income property). Under the Federal Fair Housing Act - It is illegal to deny any loan secured by a dwelling. What should I do? This loan would be great for my cash flow. Please help!


Re: denied for a home equity loan - Posted by Michael Steele

Posted by Michael Steele on February 27, 2006 at 13:45:28:


A home equity line debt ratio qualification may be different from most other standard mortgage loan qualificaitons. Since there is a good chance it may be lower, the debt ratio you assume is being used may be different. Because of this – you may now not qualify for this particular loan program.

Most direct banks have very few loan programs available and usually their guidelines are in black and white and can be very non-flexable. Basicly if your even a point off in your your ratio they won’t do the deal because they hold all their paper and sell nothing on the secondary market.

Because of this they can work around the Federal Fair Housing Act.

The thing to do for full understanding is question what thier ratio guidlines are then when your actual ratio is and thats your answer.

Michael Steele