I was denied a FHA loan.....not sure why

[Anonymous]

Hello,

I recently applied for a FHA loan and found out today i was denied.  Its very heartbreaking and discouraging.  i got this message:

( “This case has been referred because the risk exceeds the risk threshold for automated

approval for an FHA loan.”

The borrower has limited credit experience.   The 2  student loans have only been reviewed  for 4 months and the Capital One credit card has only been opened for 11 months. The credit report shows two brand new credit cards with no debt, but these are obviously affecting his credit score.

 He really needs  to wait about 12-24 months before applying again to allow for these debts to season. )

man, this feels like a kick to the stomach. i make around 32k a year with a 680 credit score and its still not good enough.  sorry i have been out of school for only 4 months and havent had 2 years of payments to make. oh yea, and sorry the only credit card i have had until recently is only 11 months old. man i just dont know what to do at this point. i recently got married and want to purchase a home and start a family.

[Anonymous]

I am sorry to hear that.  But it looks like in a year or year and half you will be in better position.  Maybe others can chime in about opening up one more tradeline to show good history, etc. 

[mynameainttracy]

Have you considered talking to a different lender?

[StartingOver10]

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@Anonymous wrote:

Hello,

I recently applied for a FHA loan and found out today i was denied.  Its very heartbreaking and discouraging.  i got this message:

( “This case has been referred because the risk exceeds the risk threshold for automated

approval for an FHA loan.”

The borrower has limited credit experience.   The 2  student loans have only been reviewed  for 4 months and the Capital One credit card has only been opened for 11 months. The credit report shows two brand new credit cards with no debt, but these are obviously affecting his credit score.

 He really needs  to wait about 12-24 months before applying again to allow for these debts to season. )

man, this feels like a kick to the stomach. i make around 32k a year with a 680 credit score and its still not good enough.  sorry i have been out of school for only 4 months and havent had 2 years of payments to make. oh yea, and sorry the only credit card i have had until recently is only 11 months old. man i just dont know what to do at this point. i recently got married and want to purchase a home and start a family.

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Did you apply to a big box type bank? For example Chase, Wells Fargo, PNC, BOA etc

Are you working in a field that is related to your degree?

Do you only have the tradelines mentioned above? No other longer tradelines?

[Anonymous]

Hello,

Yes im working in the field my degree is in. I went to a smaller local bank instead of a Chase ect (bank sent my info to their lender which declined me).  I only have the student loans, 1 CC open for 11 months with no late payments  200 usage of a 2500 credit line. i recently opened two new CC both have 0 balances.

sorry for the late response i gotta go out of town for the night and wanted to reply quickly.

also, my student loans only equal about 9k.

do you think going to a bigger bank would help? i heard it was the opposite.  only concern i have going to apply again at a different lender is it dropping my credit score due to hard inq's.

[Anonymous]

the hard inquiries if made within a close timeframe will count as 1 for scoring purposes- yes, they'll still show separately, but will only count as 1- this goes for mtg and auto loan inquiries.  Sometimes smaller lenders are the way to go- car loans and sometimes larger ones- mtg, it all has to do with their lending capabilities.  Try a larger bank, it wouldn't hurt, but most, if not all, are going to want to see 3 tradelines reporting for at least a year.

[Anonymous]

you should try a different lender. Depending what state you are in you may a have Non profit type housing aithority. Here in Rhode island we have "Rhode Island housing mortgage corporation" and massachusetts has "Masshousing".. these programs are much more in depth and detailed with Alternative credit lines like rent, insurance, cell phone and other forms of payment. see whats in your state. If you do talk to a big box lender make sure you speak to a loan officer to explain you have alternative credit before applying so they know your deal.

[StartingOver10]

No, don't go to a big box bank.

You are better off going with a mortgage banker (a/k/a correspondent lender) - all they do is mortgages.

[ezdriver]

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@StartingOver10 wrote:

No, don't go to a big box bank.

You are better off going with a mortgage banker (a/k/a correspondent lender) - all they do is mortgages.

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x2 ... don't give up so easily. If mortgage money was super easy to get, everyone would be doing it.

[Anonymous]

It won't hurt to try other lenders.

If I may, I'd like to add you are no longer in school but the real world. There are many on this board who have been working for years and still trying to secure a home. In the real world people get told no all the time

Ok, so your feelings are hurt they shot ya down, they explained the reasons why. Many in this country want it when they want it, and do not like being told "wait, you're not ready yet"

I'm not saying that's you, so try another lender and if the result is the same don't take it personal, just go to work.