Bad Credit Home Loans With Collections & Charge Offs
Many renters are under the belief that they need a 20% down payment and good credit to qualify for mortgage loans. This is not the case. The Team at Non-Qm Mortgage Brokers specializes in helping home buyers qualify for bad credit home loans. We help homeowners with bad credit home loans in most of the 50 states. Non-Qm Mortgage Brokers Mortgage Group can help home buyers qualify for bad credit home loans. Many do not realize they can qualify for home loans with bad credit. Many assume that they do not qualify for home loans just because they have outstanding collections and charged-off accounts. We will cover in this blog how credit scoring can affect the chances of getting a loan.
Our viewers will have an even greater chance of making the dream of homeownership a realistic reality. Non-QM Mortgage Brokers are mortgage lenders licensed in 48 states, including Washington, DC, and Puerto Rico, and the U.S. Virgin Islands. We have a national reputation for no lender overlays on government and conventional loans.
Non-Qm Mortgage Brokers Mortgage Group can help home buyers qualify for a 3.5% down payment home purchase FHA Loan with credit scores as low as 580 FICO.
Over 80% of our borrowers were told they do not qualify for a home loan by other lenders due to their overlays. Non-Qm Mortgage Brokers have no overlays on government and conventional loans. This article will cover and discuss qualifying for a home loan with bad credit. This article will cover and discuss qualifying for bad credit home loans.
Qualifying For Bad Credit Home Loans
Borrower’s credit scores will dictate the mortgage interest rates. A low credit score means higher mortgage rates, credit card rates, automobile loan interest rates, and installment loan interest rates.
Over 80% of our borrowers were told they do not qualify for a home loan by other lenders due to their overlays. Non-Qm Mortgage Brokers have no overlays on government and conventional loans.
Many employers pull credit checks as part of their hiring and promotional process. Job applicants can be turned down for a job with bad credit scores. Employees can be denied a promotion with less-than-perfect credit. There are many negative impacts of bad credit.
How Else Can Impact of Credit Scores on Mortgage Loans?
Employers view those who have bad credit as being financially irresponsible. That is not always the case. A person can lose a job and, due to the loss of income, can be behind in their payments. One 30-day late payment on a monthly payment can drastically impact a person’s credit score. Some jobs disqualify a person from a job position if they have ever filed for bankruptcy. In some states, loan officers cannot be a mortgage loan originator license if the applicant has filed for bankruptcy or has outstanding judgments, collections, or foreclosure.
Impact of Credit Scores on Mortgage Have Effect on Insurance Premiums
The impact of credit scores on mortgage loans also includes a higher insurance premium. Mortgage loan applicants with poor credit scores will pay more in insurance premiums than those with better credit scores. It does not matter what type of insurance. The insurance company will even pull credit for homeowners insurance. The impact of bad credit scores will affect the cost of homeowner’s insurance.
Other Negative Impacts of Credit Scores on Mortgage Loans
Another negative impact of credit scores on a mortgage is whether or not you qualify. Mortgage loan applicants who have had a recent late payment on an installment loan could be disqualified for a mortgage loan. It would be next to impossible for a homeowner to qualify for a mortgage refinance loan if they had a late payment in the past six months.
Qualifying For Bad Credit Home Loans
There is a light at the end of the tunnel for those with bad credit. Consumer credit will naturally improve as bad credit ages. For consumers with collections, bankruptcy, or foreclosure on their credit report, their credit scores will naturally improve as months and years pass—the more time that goes by, the less the impact of bad credit scores.
The team at Non-QM Mortgage Brokers are experts in helping borrowers maximize their credit scores fast.
After two years, most bad credit will not impact credit scores. We will be discussing more on credit repair and how to improve your credit scores in future blogs.
FHA Bad Credit Home Loans
FHA is the most popular loan program in the United States for first-time home buyers and borrowers with bad credit. Not all mortgage lenders have the same FHA mortgage requirement.
Two Types of FHA Guidelines
- HUD Guidelines
- Mortgage Lender Overlays
All FHA mortgage applicants need to meet HUD Guidelines. HUD (U.S. Department of Housing and Urban Development) is the parent of FHA (Federal Housing Administration).
Non-QM Mortgage Brokers is one of the very few mortgage lenders that has a no lender overlays business platform on government and conventional loans.
HUD is not a lender, but a government agency that insures FHA loans originated and funded by banks and private mortgage lenders if homeowners default on their FHA loans. HUD will insure the financial institution against loss due to foreclosure. However, for HUD to insure lenders, lenders must follow all HUD guidelines.
How Can I Qualify For FHA Loan With Bad Credit?
What are bad credit home loans? HUD has very generous FHA guidelines for borrowers with bad credit home loans. However, please do not confuse it with currently having prior bad or bad credit.
Non-QM Mortgage Brokers has a national reputation for being able to do mortgage loans other lenders cannot do.
Lenders who specialize in bad credit home loans, like Non-Qm Mortgage Brokers, have no problem qualifying borrowers with prior bad credit but want to see if they have re-established credit and been timely for the past 12 months.
Here are FHA Guidelines on Bad Credit Home Loans:
- Minimum 580 Credit Scores for 3.5% down payment home purchase loans
- Outstanding collections and charge-off accounts do not have to be paid
- Maximum debt to income ratio 46.9% front end and 56.9% back end
- Multiple non-occupant co-borrowers allowed
- 100% gift funds for a down payment allowed
- Up to 6% seller concessions allowed
- The 2-year waiting period after the Chapter 7 Bankruptcy discharge date to qualify for FHA loans
- 3 year waiting period after the recorded date of foreclosure and deed-in-lieu of foreclosure to qualify for FHA loans
- 3 year waiting period from the short sale settlement date reflected on HUD to qualify for FHA loans
- No waiting period after the Chapter 13 Bankruptcy discharge date to qualify for FHA loans (Manual Underwriting)
- Borrowers can qualify for FHA loans one year into a Chapter 13 Bankruptcy repayment plan with Trustee Approval (Manual Underwriting)
Borrowers who need to qualify for FHA bad credit home loans with a direct lender with no lender overlays, please get in touch with us at Non-Qm Mortgage Brokers at 1-800-900-8569 or text us for faster response. Or email us at gcho@gustancho.com. We are available evenings, weekends, and holidays seven days a week.
