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Denied a house loan from Quicken

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gbfan10
Valued Member

Denied a house loan from Quicken

I have been planning on selling my house for awhile now, and have worked hard to get my credit up to a decent level.  My experian FICO is 663, my Transunion is 643.   I called Quicken loans today to see if I had enough equity to sell and buy a new house.  They talked me into running my credit and denied my loan saying my credit is crap.  They reported a 593 experian, 605 Transunion.   

 

What is that all about?  She is 70 points lower than what my score is reporting on Experian and TU.  This isn't a fake CreditKarma score, but what I was told a real FICO.

 

 

Now it will even go lower with that hard inquirey.   I am so upset right now.

 

Message 1 of 15
14 REPLIES 14
gbfan10
Valued Member

Re: Denied a house loan from Quicken

If I apply at another morgage place, woudl this add yet another hard inquiry?  I thought you could "shop around" a bit and not mess up inquiries. 

Message 2 of 15
gbfan10
Valued Member

Re: Denied a house loan from Quicken

I looked this up

 

Here's a list of credit scores per website-

Credit Karma - Vantage Score
Experian- PLUS Score
Equifax- Equifax Credit Score
TransUnion- Vantage Score
myFICO- FICO Score

Mortgage lenders don't care about any other brand of score other than FICO.  Even your FICO score from Discover is different from a mortgage FICO score.

FICO has designed 53 different models of scores, they risk grade different industries (mortgage, auto loan, insurance, credit card).  

To find your FICO score that your mortgage lender will use, go to www.myfico.com .  They will show you a FICO score for mortgage, auto, etc...

Message 3 of 15
Anonymous
Not applicable

Re: Denied a house loan from Quicken

Your last post is absolutely right. 

 

The bottom line is that FICO makes many different kinds of credit scores.  One FICO model is commonly referred to as your "mortgage scores."  It's called this because Fannie Mae and Freddie, who have a huge monopoly on how mortgage credit is run in the US, recognize only this scoring model.   That's unfortunate in many ways and might change depending on whether a certain bill now being considered in Congress becomes law.

 

But right now, and for the next several months at least, assume that the only credit scores that could matter when buying a home are your FICO "mortgage" scores.

 

You can indeed purchase them from myFICO.  Purchasing them will not count as a hard inquiry.  But I might argue that right now you don't need to buy them.  By applying through Quicken recently (and being rejected) you have been given your recent mortgage scores.  Buying them on myFICO or applying at other lenders will just cost money or involve work, and will result in the same depressing news.

 

A person's "mortgage" scores are often (though not always) much lower than his other FICO scores.  (The single most commonly available FICO score, often given through credit cards, is the FICO 8 classic score.)  So the fact that your mortgage scores are much lower would not be a surprise to many of us here on this forum.

 

From your first few posts, it sounds like there are several things you wish to do.

 

(1)  You wish to find out how much equity in your current home.  That's a great question to look into.  You should do that with whoever is handling your current mortgage.  Talking to prospective lenders about a mortgage for a new home won't answer that, and a credit pull is not needed to answer the question about equity.  You can and should also be looking at your credit reports (different from your credit scores).  The reports will tell you how much your home loan was originally for and of that amount how much you still owe.

 

(2)  You wish to explore the possibilty of buying a new home.  To do that you should talk to realtors and figure out how much the kinds of homes you want in the neighborhoods you are looking for are currently selling for (realistically).  This also does not require a credit pull.

 

You should do these things first.   Note that selling your current home does not entail necesssarily buying another.  I know a married couple who are selling their current home and will be making a strong profit on it (given that they bought it 5 years ago).  They will then rent for a year or two while they find the place they want to buy, and while they also work on improving their credit scores.  This is an option you could consider too.

 

At the same time that you work on #1 and #2 you can also look into how it is that you might improve your mortgage scoress.  It sounds like your current scores are very low and most of the people here on the Forum would tell you that they need to be much higher if you want to buy -- if that is you don't want to pay extremely high rates of interest.  There are a number of people who can help you with that.

 

Do you have your three credit reports?  (Or a single report that contains merged data from TransUnion, Equifax, and Experian?)  Probably the most important first step in your credit building journey will be pulling your credit reports and learning how to understand every line on them 100%.  At the same time you'll need help here on the forum learning how the FICO scoring system works so you can improve your scores.

Message 4 of 15
gbfan10
Valued Member

Re: Denied a house loan from Quicken

 

 

Thanks for the info, I've been rebuilding my credit for a couple of years now, and have taken them from a dismal score, up to 670 with Experian.   I know they could be better, but I am making progress.  If anything, I have learned there is a awful discrepancy between fico scores.   I will have to wait for my score to go up.

 

 

Message 5 of 15
Anonymous
Not applicable

Re: Denied a house loan from Quicken

Don't hesitate to visit the Rebuilding sub-forum here.  Lot of people willing to help there.

 

The best two things you can do is working on getting your derogs removed (sometimes impossible but often can be done with enough patience, insight, and gentleness on your part) and paying down your credit cards.  Ideally it would be great to have all your CC debt paid off and then use exactly one CC to make a small purchase each month (with all the other CCs showing a $0 balance).

Message 6 of 15
Revelate
Moderator Emeritus

Re: Denied a house loan from Quicken

Message 7 of 15
JustinA
Frequent Contributor

Re: Denied a house loan from Quicken

Quicken is a waste of time in my opinion. I spent a year trying to get a mortgage with them...solution for them was dispute everything. And then dispute again.

Ended up not getting a mortgage with them and went with a local bank. Personally I'd go a different path

Starting TU: 536
Starting EQ: 573
Goal: 640


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Message 8 of 15
Anonymous
Not applicable

Re: Denied a house loan from Quicken

Quicken denied my DH and told him to try again in a year. Instead he went to a local bank and local credit union...both did a pre-approval instead of a pre-qual and he went with the local bank and closed on the house...the only thing that he had to explain was a old collection from Sprint that was set to fall off by the time the house closed. It was a FHA loan so that does play a part in the score (they use mortgage scores which I think are Fico 2 not Fico 8 that shows as the main score in MyFico) at the time I think it was a 580 score and got him a 4.99% APR..Refinanced a year later after score hit a 640 across the board on Fico 2 and ended up with a 3.99%.....Like other said...run it through your local CU or local bank that knows your Market...make sure your DTI is no more than 40% (usually the highest most banks will go for FHA) Conventional is different...I've seen people that thought they would not qualify after talking to Quicken go local and (me as their agent, close on their homes successfully with no hiccups) 

 

Good Luck Smiley Happy

Message 9 of 15
StartingOver10
Moderator Emerita

Re: Denied a house loan from Quicken

OP, as pointed out above, your FICO mortgage scores differ from FICO 8 scores. Rev posted the link so you can study about the mortgage scores.

 

Everytime you to go to a mortgage lender and have them pull your credit you will have a HP.  There is no SP's when you apply for a mortgage - or ask for a pre-approval.

However, when you pull your scores here it is a SP.

 

There is a piece of information above that I need to correct.  You can NOT get your equity amount from your lender/servicer.  

 

You CAN get an approximate payoff amount by looking at your account.  The official payoff is done in writing and the lender will charge you for it so don't ask for the official payoff, that is handled through the title company when you close.

 

To determine equity:  have one or more experienced Realtors come to your home and provide a market analysis.  The market analysis will give you an idea of the sales price and from that you can deduct your selling expenses and approximate mortgage payoff.  Most experienced Realtors can give you a Seller's Net Sheet so you know how much equity you have in your home.

 

If you ask your CSR at your lender they won't be able to answer the question accurately - if at all.  They don't know your market, they only service the loan. Some will try to BS you with an automated valuation type figure but those AVM's are very, very inaccurate IME. They don't take into account any particulars' about your home such as location, view and condition and even in many instances property type. 

 

So, if you really want to buy a new place, first check your mortgage scores here. Then, if you need to get them up, visit the rebuilding forum.  FHA loans can be issued if your mid score is 620 - even lower, but then you need at least 10% down and not all lenders will loan on scores less than 620.  A few lenders will go to 580.  A very few will go to 500 (for FHA). So it really does help you if you get your mortgage scores up over 620.  

Message 10 of 15
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