Wednesday, February 12, 2014

Banks Using Every Reason to Decline Loans

Many of you who are reading this may have experienced first hand what it’s like in the current bank lending environment to get a loan. In some cases, bank underwriting criteria is downright ridiculous and frustrating. And with the new QM Rule, or ‘Qualified Mortgage’ Rule, even less potential borrowers will qualify for loans this year. For this reason, more people will be seeking private money mortgages in 2014.
There are so many stories out there such as this one. A borrower with perfect credit and good income is declined at the bank after months of deliberation. In some cases, a lot is at stake in a real estate transaction including large earnest money deposits, third party fees, and invested time. Many banks simply aren’t lending on investment properties, particularly vacant and poorly maintained properties. Although many people may complain about the higher interest rates charged by commercial hard money lenders, at least bridge loans are readily available for financing on under improved properties or in cases when a bank decline is imminent.

Because banks won’t be lowering their underwriting standards in 2014, and competition for loans will be higher than ever this year, borrowers should get a head start on financing options and get lots of them. Visit for more information.

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