Bad Credit Home Loan Florida With Collections

This BLOG On Qualifying For Bad Credit Home Loan Florida With Collections Was Updated On May 17, 2017

The real estate market in the state of Florida is hot. Home prices in every county in Florida is appreciating and there are more demand of Florida homes than there are homes in the market. Florida home buyers can qualify for Bad Credit Home Loan Florida with FHA Loan programs where borrowers do not have to pay off outstanding collections and charge off accounts to qualify for FHA Loans. I run into many case scenarios that might help my readers.

Lets take this case scenario.

  • Mike Jones got married to Robin Jones. 
  • Mike owns a house and Robin moved in with Mike when they got married on June 2005. 
  • Everything went well for both Mike and Robin until August 2008 when both Mike and Robin lost their jobs. 
  • Their unemployment was a fraction of the income they both made and they soon were getting behind on their mortgage payments. 
  • Long story short, the Jones’s voluntarily turned in their keys to the lender and got foreclosed on March 2011. 
  • Both Mike and Robin got new jobs and are making a stable income. 
  • They have 580 credit scores.
  • They have one secured credit card and pay everything cash. 
  • They both several credit cards that have been charged off and a few collection accounts.

On the above case scenario, Mike and Robin will qualify for a FHA Loan with not needing to pay off their outstanding collection accounts and charge offs.

Bad Credit Home Loan Florida Mortgage Lenders

Robin went to several different lenders and was told that she does not qualify for a FHA Loan because she did not have a 620 FICO credit score and needed to pay off her outstanding collection accounts and charge off accounts. She went to another lender and she was told that she would not qualify for a FHA Loan because she does not have a 640 credit score.

Why is she being told different credit score requirements by the lenders?

  • Lenders have lender overlays in underwriting on FHA Loans.
  • Just because borrowers meet HUD Guidelines on credit scores does not mean the lender will qualify and approve them.
  • FHA Guidelines On Credit Scores is borrowers can have 580 FICO Credit Scores and qualify for 3.5% down payment home purchase FHA Loan.
  • However, most lenders will require higher credit scores than those required by FHA. 
  • This is called lender overlays on credit scores.
  • Same will collections and charge off accounts.
  • FHA does not require borrowers to pay off outstanding collection and charge off accounts.
  • However, lenders can have overlays on outstanding collection and charge off accounts where they will require them to pay them off in order for them to do the loan.
  • The Gustan Cho Team has no lender overlays on FHA Loans.
  • Home buyers can qualify for FHA Bad Credit Home Loan Florida with 580 credit scores and do not need to pay off outstanding collections and charge offs.

No Waiting Period After Bankruptcy And Foreclosure

Home Buyers who need to get qualified for Bad Credit Home Loan Florida with prior bankruptcy and foreclosure can qualify for a home mortgage with no waiting period with our new NON-QM Loans.

Here are NON-QM Mortgage Loan Program Requirements:

  • No Waiting Period After Bankruptcy and Foreclosure
  • Bank Statement Mortgage Loan Program for self employed borrowers
  • No Doc Fix And Flip Loans
  • No Doc Investment Property Loans

Qualifying For Traditional Loans After Bankruptcy And Foreclosure

Robin found out that I specialized in bad credit home loan through one of my clients and called me when they can qualify for a mortgage.

  • She heard that there was a waiting period for homeowners who had a foreclosure on their record. 
  • I told her to submit an online mortgage application via my website and she did so. 
  • I ran both Mike and Robin’s credit and found out that foreclosure was only on Mike Jones’s credit report only and not Robin’s.
  • I inquired about the foreclosure and found out that Mike had owned the foreclosed home prior to marrying Robin and did not meet the mandatory waiting period to qualify for a FHA Loan after foreclosure.
  • Robin made sufficient income where we were able to just put her on the FHA Loan and both Mike and Robin can be put on title.

There are waiting period requirements to qualify for government and conventional loans after Bankruptcy and Foreclosure.

Waiting Period After Bankruptcy And Foreclosure

  • There is a two year waiting period to qualify for FHA Loans after Chapter 7 Bankruptcy discharged date
  • Home buyers can qualify for FHA Loans one year into a Chapter 13 Bankruptcy repayment plan
  • There is no waiting period to qualify for FHA Loans after Chapter 13 Bankruptcy discharged date
  • There is no waiting period to qualify for FHA Loans after Chapter 13 Dismissal Date
  • There is a four year waiting period to qualify for Conventional Loans after Chapter 7 Bankruptcy discharged date
  • There is a two year waiting period to qualify for Conventional Loans after Chapter 13 Bankruptcy discharged date
  • There is a four year waiting period to qualify for Conventional Loans after Chapter 13 dismissal date
  • There is a three year waiting period to qualify for FHA Loans after the recorded date of foreclosure and/or deed in lieu of foreclosure and the short sale date of a short sale
  • There is a four year waiting period to qualify for Conventional Loans after the recorded date of a deed in lieu of foreclosure or short sale date of a home
  • There is a seven year waiting period to qualify for Conventional Loans after a recorded date of a standard foreclosure
  • There is a four year waiting period to qualify for a Conventional Loan after the discharged date of a Chapter 7 Bankruptcy if they had a mortgage or mortgages part of their Chapter 7 Bankruptcy discharge
  • However, the transfer of title need to have happened with a short sale, deed in lieu, or foreclosure once the mortgage or mortgages was part of the Chapter 7 Bankruptcy. The four year waiting period starts from the discharged date of the Chapter 7 Bankruptcy.

Getting Qualified For Bad Credit Home Loan Florida

On a case like this, Robin qualified for a new home purchase loan but not Mike.

  • I suggested that Robin try to qualify for the mortgage by herself and add Mike to the title. 
  • After running Robin’s credit and income, Robin qualifies for the mortgage. 
  • Both Mike and Robin decided to take this route and buy a new home.

If you are in a similar situation like Mike and Robin, you too can qualify for a bad credit home loan Florida.  Please contact me at 800-900-8569 or text me on my cell at 262-716-8151 for faster response. Home buyers can also email us at gcho@gustancho.com. We are available 7 days a week, evenings, weekends, and holidays to take mortgage inquiries and go over case scenarios.

Gustan Cho NMLS ID 873293
The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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