Bad Credit Home Loans Florida With Collection Accounts

This BLOG On Bad Credit Home Loans Florida With Collection Accounts Was UPDATED On May 30, 2017

Florida home buyers can Bad Credit Home Loans Florida With Outstanding Collection Accounts and Charge Off Accounts.

  • Under HUD Guidelines, HUD is the parent of the Federal Housing Administration (FHA), mortgage applicants do not have to pay outstanding collection accounts and charge off accounts to qualify for FHA Loans.
  • Lenders that do require collections and charge off accounts to be paid off require it due to their own lender overlays and not because of FHA Guidelines On Collection Accounts.
  • Lenders can have higher lending requirements on FHA Loans that is above and beyond those of FHA minimum credit guidelines.
  • This higher requirement is called lender overlays.

Bad Credit Home Loans Florida With Low Credit Scores

A large percentage of our borrowers have credit scores under 600 FICO.

  • FHA requires a minimum of 580 credit score to qualify for 3.5% down payment FHA Loan
  • Most lenders require a 620 to 640 credit score even though FHA only requires a 580
  • This higher credit score requirement by other lenders is called lender 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.
  • We do 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 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. 
  • Good news is that home buyers can qualify for bad credit home loans Florida with low credit scores.

Bad credit and low credit scores can become an issue.

  • Mortgage applicants with bad and low credit scores can be denied a mortgage 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.
  • Borrowers with bad credit and lower credit scores will get higher private mortgage insurance premium.
  • Borrowers with bad credit and lower credit scores will get higher homeowners insurance premium.
  • Bad credit can cost a potential employee a job or promotion.

Bad Credit Home Loans Florida Lenders

Not all mortgage lenders have the same credit requirements on FHA Loans. As mentioned earlier, minimum credit scores to qualify for a 3.5% down payment FHA Loan is 580 FICO, however, most lenders require higher credit scores even though HUD only requires 580.

  • Many mortgage companies cannot qualify a mortgage loan borrower who has a credit score under 640 due to their companies 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 who I represent are folks who were told they do not qualify for FHA Loans by other lenders due to lender 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

I work a little differently than other mortgage lenders.

  • Most other mortgage lenders normally tell their mortgage loan 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, The Gustan Cho Team helps borrowers with bad credit fix their credit so they get qualified.
  • On situations where mortgage applicants do not qualify for home loan because they might have had some recent late payments, we advise them on what steps to take so they become qualified. 
  • We help borrowers with bad credit get credit qualified no matter how long it takes.
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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