$80,000 Damaged Credit Loan – Toledo Ohio

This client would like to be approved for a $80,000 mortgage where he is combining an existing mortgage with additional equity that he wants to use to complete a number of renovations on his home.  He is quite frustrated, believing that he has done everything correctly, yet he has been told that he has damaged credit. He lives in Toledo Ohio.

This client should have an excellent credit rating, however instead he has been told that he has a damaged credit rating. This is actually quite common for people who either have a lot of cash and pay with cash or have not taken out loans to establish a credit rating. It is not that he has a bad credit rating. The reverse is true in that he has not had sufficient financial activity to establish a good credit rating. This may seem incomprehensible to many people, but sadly this is true. Lenders are trying to establish if you have a good record of meeting your obligations and in situations where you pay cash for everything; you are not demonstrating that you can meet your obligations. You really do not have any!

Many people in this situation have found that they need to either go to their local bank were they have a good reputation and hopefully be approved for their loan or demonstrate that they have a lot of equity in their homes.

Our client in his application talked a lot about the way he manages his financial affairs and how shocked he was that he could not be approved for his loan. The lenders are going to need more information about the value of his home and how much equity he has in his home after this new loan would be approved. If he has a lot of equity which is equivalent to a large down payment, there is a very good chance that he will be approved for this loan. An appraisal will be required to establish the value of his home.

This situation is not actually that uncommon. Many business owners, self employed people and even very rich people will have this situation of damaged credit simply because they have not built up a record of borrowing and then repaying their debts on a regular basis and on time.

Home/Mortgage Loan Amount :: $80,000

Home Loan Application and Processing Speed (when do you need the funds):: pretty quick if possible

Do you currently have a mortgage? :: yes

Bank Name and Branch :: Fifth Third Bank, Lagrange St

What City/Town, State and County do you live in? :: Toledo , Ohio

Zip :: 43608

What is your employment field? :: Auto Parts Supplier

Employment Position :: Auto Parts Manager

When are you paid? (monthly/weekly/biweekly):: Bi Weekly

Your credit rating to be – excellent, fair, or bad? :: Damaged credit rating

How did you find us? :: Searching for loans on the internet

How are you paid? (direct deposit/paper check):: Direct deposit to my checking account

Gross Amount Per Paycheck :: $2,115

Do you agree to have this information published online, without your PRIVATE information of course? :: of course , just keep the personal stuff private

Extra information here please (some detail):: This is really weird and I am having trouble actually understanding what is going on. I have never missed a payment on my mortgage or any other loan. I have one credit card, which is always paid in full every month, but you should know that I usually just pay cash for everything and try not to use my credit card any more than I have to. The balance on my credit card is usually zero and I do not need to pay anything.

I have a used car which I also paid cash for and since I am in the auto parts business, I get all of my parts at a discount. A buddy of mine works at a garage which he co-owns with another guy. We go into the garage on weekends and do any repair that I need for my car. As a result I hardly spend anything on this car. I walk to work also so I do not even have to spend money there either.

Everything was great until I found out that I needed to replace my roof and then I decided that I might as well renovate my house at the same time. I have a mortgage of $45,000 and want to add another $35,000 to it for a total of $80,000. Now for the weird part of this story.

Note to Lender :: You would think that I would have an excellent credit rating! The reverse is actually true. The last loans manager I spoke to told me that I had damaged credit because I have not borrowed enough money to establish a credit rating. As a result all of the lenders are nervous about lending any money to me.

I have a really great job that I enjoy and have been there for many years. I am well respected at the job, make decent money and expect to be there for many more years. We have a good business and the company is doing well. All of this to say that my job is secure as anything can be in this economy.

So why cannot I be approved for a loan? I am told that I have to apply for damaged credit loan which totally confuses me with the way that I have managed my savings, my debt and my finances over all. Can you help me sort through this?