By Allen Norwood
Some builders and real estate pros tell me that borrowing isn’t much of an issue for their customers. Others say that lenders are tough – and getting tougher – and seem to be looking for ways to deny mortgage money.
How can they possibly be describing the same lending environment?
They aren’t, according to two area leaders in the Mortgage Bankers Association of the Carolinas. There’s a wide gulf between treatment of borrowers with good credit and income, and those who lack both. The two groups face different hurdles, different outcomes.
David Whitley Jr. of Whitley Mortgage in Monroe is one of three state association directors. Janet Gaglione of Monarch Mortgage represents the Charlotte regional association.
There’s a straightforward reason some builders report few problems, Gaglione said. They’re more likely to sell in higher price ranges, and attract more qualified prospective buyers. “It depends on the class of the builder or class of the customer.”
A builder selling $450,000 houses is, indeed, operating in a different environment than one selling starter homes for $114,500.
Whitley serves customers in middle-class Charlotte suburbs, and in rural areas such as Anson and Richmond counties.
Those with good income and credit in Charlotte don’t have much trouble, he said. Those with limited income and little or no down payment in rural areas, especially those turning to programs like those offered by the FHA or USDA, can struggle to qualify. In fact, instead of becoming smoother, the road to loans for those borrowers seems to be getting rougher. The gulf is growing.
“I see both sides,” he said. “It can be night and day.”
Some qualified borrowers don’t like to verify income or answer questions they didn’t face the last time they got loans. They might describe a tight lending environment. But, in the end, said Whitley and Gaglione, they qualify.
“We’re not giving the money away, like we were a couple of years ago,” Gaglione said. “... That never should have happened, and it’s not happening this time.”
First-time buyers with limited incomes and checkered credit can be overwhelmed by the questions and paperwork, which makes qualifying even more difficult.
There are lots of other reasons that someone’s perception of lending might not match someone else’s.
There’s all that consumer wariness and weariness to overcome. Things were really bad – especially for those who lost jobs or even homes – and those folks will need lots of convincing about how much things have improved.
But they have improved for many of us. “We’re in a much better place than we were last year at this time,” Gaglione said.
I can tell from emails and online chatter that some aspiring homebuyers have decided they’ll never get loans, and have given up without trying. Is the real estate press partly responsible, for focusing on troubled transactions instead of smooth ones? A bit, Whitley and Gaglione said.
Don’t give up because of what you hear or read.
Do what prospective borrowers always should do: Go to an experienced pro to see if you qualify, they said. If you don’t, get some advice and go to work on your credit.
“It might be a six-week plan, it might be a six-month plan,” Whitley said. “Sometimes, it might look like it will take six years ... But they will put you on a path to qualify.”