Mortgage Loan Woes.

Some of the guidelines on getting a mortgage these days is just CRAZY.

Exhibit A)   I have a client with a great credit score.  He has 1 Visa card with a very low balance.  In fact he pays it off every month.  His car; paid for.  No student loans and he has a decent savings.

The problem; he doesn’t have enough lines of credit to get a conventional mortgage.  He can go FHA; but why – he is putting down OVER 20% !   FHA is usually for those folks who only have the minimum 3.5% down payment.

So in walks his father.  His father will co-sign the loan with him.

Exhibit B)  Dad – great income. Substantial savings and investments.  Two credit cards.  All paid down to almost nothing and paid off every month.  Very high credit score.  House – paid off.  Cars – paid off. Basically zero debt.

Not enough credit lines to qualify for a conventional mortgage.  They must go FHA and pay FHA fees.

REALLY ?!

It seems the fact that they do not have enough credit likes Hurts them to a point where they cannot get a conventional loan.  Rules are important; and I suppose are in place to protect banks and the economy.  5 years ago my dog could have gotten a mortgage; but now it’s harder and harder.

So get this:

Dad was so annoyed; he decided to just pay CASH for the house and have his son pay him back.

Yes; thats right.  The man couldn’t get a loan for the house without thousands of dollars of fees because he “didnt have enough credit”; so he paid cash.

Now really – does this make any sense?