Bad Credit Home Loans Florida With Collection Accounts

This Article Is About Bad Credit Home Loans Florida With Collection Accounts

Florida home buyers can Bad Credit Home Loans Florida With Outstanding Collection Accounts and Charge Off Accounts. Under HUD Guidelinesmortgage applicants do not have to pay outstanding collection accounts and charge off accounts to qualify for FHA Loans. HUD is the parent of the Federal Housing Administration (FHA).

Lenders that do require collections and charge off accounts to be paid off require it due to their own lender overlays:

• Not because of FHA Guidelines On Collection Accounts

Lenders can have higher lending requirements on FHA Loans that are above and beyond those of HUD minimum credit guidelines:

• This higher requirement is called lender overlays

In this article, we will discuss and cover qualifying for a mortgage with bad credit.

Bad Credit Home Loans Florida With Low Credit Scores

A large percentage of our borrowers have credit scores under 600 FICO. HUD requires a minimum of 580 credit score to qualify for a 3.5% down payment FHA Loan. Most lenders require a 620 to 640 credit score. This holds true even though FHA only requires a 580. The higher credit score requirement by other lenders is called overlays on credit scores. If borrowers are told they do not qualify for FHA Loan due to not having 620 to 640 credit scores, contact us at 800-900-8569 or text us for a faster response. Gustan Cho Associates does not have any overlays on government and conventional loans.

Borrowers with credit scores between 500 to 579 FICO can qualify for FHA Loans but need a 10% down payment. There are a variety of reasons why mortgage loan borrowers have credit scores under 600. Some folks have bankruptcies, foreclosure, collections, charge-offs, judgments, and/or tax liens. Other people have credit scores under 600 because they do not have enough credit. One recent 30-day payment can drop a person’s credit scores by more than 50 points. Yet others have credit scores under 600 because they did not use credit and have no current credit history.

The good news is those home buyers can qualify for bad credit home loans Florida with low credit scores.

How Bad Credit With Lower Credit Scores Can Become Hurdles When Qualifying For Mortgage

Bad credit and low credit scores can become an issue. Mortgage applicants with bad and low credit scores can be denied a mortgage. This is depending on how recent the late payments were or how low the credit scores are. Borrowers with bad credit and lower credit scores can get a much higher mortgage rate. Homebuyers with bad credit and lower credit scores will get higher private mortgage insurance premiums on conventional loans. Mortgage borrowers with bad credit and lower credit scores on government loans will get the same homeowners’ insurance premium as good credit borrowers. Bad credit can cost a potential employee a job or promotion.

Bad Credit Home Loans Florida Lenders

Not all lenders have the same credit requirements on FHA Loans. As mentioned earlier, the minimum credit score to qualify for a 3.5% down payment FHA Loan is 580 FICO. Most lenders require higher credit scores even though HUD only requires 580. Many mortgage companies cannot qualify borrowers who have a credit score under 640 due to their company’s overlay policy. Borrowers who have lower credit scores need to consult with a lender with no overlays on credit scores. Over 75% of my borrowers Gustan Cho Associates represent are folks who were told they do not qualify for FHA Loans by other lenders due to overlays.

There are overlays on FHA Loans not just with credit scores but debt to income ratio, verification of rent, credit tradelines, collection accounts and charge off accounts, and other credit items.

Qualifying For Bad Credit Home Loans Florida

Gustan Cho Associates works a little differently than other lenders. Most other lenders normally tell their borrowers whether they are qualified or not. If borrowers do not qualify, my staff and I will work together on issues or hurdles to overcome.

Whether it takes a few days or weeks or even months, Gustan Cho Associates helps borrowers with bad credit fix their credit so they get qualified. In situations where mortgage applicants do not qualify for a home loan because they might have had some recent late payments. We advise them on what steps to take so they become qualified. Gustan Cho Associates help borrowers with bad credit get credit qualified no matter how long it takes.

Borrowers with credit issues needing a direct lender with no overlays on government and conventional loans, contact us at Gustan Cho Associates Mortgage Group at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com.