Bad Credit Mortgage Loans California With No Lender Overlays

This Article Is About Qualifying For Bad Credit Mortgage Loans California:

All the talk of skyrocketing home prices and the mass exodus of Californians fleeing to states with lower home prices has not made a dent in California home values. Home prices in California have skyrocketed even more. In this article, we will cover the following topics:

  • The demand for housing in California.
  • The ability to qualify for a mortgage in California with bad credit.
  • Can you qualify for a high-balance loan with less than perfect credit?
  • What are my options to qualify for a mortgage in California with Non-QM loans?

Over 75% of our borrowers at Gustan Cho Associates are folks who could not qualify at other lenders. The team at GCA Mortgage says yes when other mortgage companies say no.

Prequalify for a mortgage in just five minutes. 

The Ability To Qualify For A Mortgage In California With Bad Credit

Qualify For A Mortgage In California With Bad Credit

Gustan Cho Associates specializes in originating and funding Bad Credit Mortgage Loans California with no lender overlays.

California is one of the top states that got affected by the Great Recession of 2008. Many California residents lost their jobs, businesses, and homes. California is also the largest state in the continental United States and has one of the highest home prices.

California citizens can qualify for Bad Credit Mortgage Loans California with no overlays. Gustan Cho Associates specializes in Bad Credit Mortgage Loans California with no overlays on government and conventional loans.

Plus, NON-QM Loans are a very popular loan program where there is no waiting period after bankruptcy and foreclosure. Homebuyers can now qualify for home loans after bankruptcy and foreclosure in California without needing to meet mandatory waiting periods.

FHA Streamline Refinance In California

Due to the high home prices in California, most counties in the state of California has larger FHA Loan Limits. Homeowners with current FHA Loans can qualify for FHA Streamline Bad Credit Mortgage Loans California.

Here Is The FHA Streamline Refinance With Bad Credit Qualification Requirements

No Credit Score Requirement:

  • Recent late payments, recent collections, recent charge offs does not matter
  • The only requirement is that the homeowner needs to have been timely on their current FHA Loan for the past 12 months
  • An appraisal is not required
  • There is no income verification is required so debt to income ratios is not an issue
  • Closing costs is not required by the borrower: Lender credit will pay all borrower’s closing costs

Other California Refinance Loan Programs

California homeowners who are thinking about refinancing their mortgage, there are other options.

Here are some California mortgage refinancing options homeowners may consider:

  • Refinancing 30-year fixed-rate mortgage to 15-year fixed-rate mortgage
  • 15 year fixed rates have lower mortgage interest rates than 30 year fixed mortgage rates
  • Refinancing their adjustable-rate mortgage (ARM) to a 15 or 30 year fixed rate mortgage
  • Refinancing 15-year mortgage to 30-year fixed-rate mortgage to reduce the monthly mortgage payment
  • Take out co-borrower with refinancing
  • Cash-out refinance
  • Refinance FHA Loan into a Conventional Loan to avoid paying annual FHA MIP

Refinancing Adjustable Mortgage Rates To Fixed Rate Mortgage

Refinancing Adjustable Mortgage Rates

There are many homeowners who have adjustable-rate mortgage loans, also referred to as an ARM, from the sub-prime days with high or no limits on interest rate increases.

  • Homeowners who have such loan programs should seriously consider switching it to a fixed-rate mortgage or to an adjustable-rate mortgage that limits changes in the rate at each adjustment date as well as over the life of the loan
  • California homeowners can still get competitive mortgage rates with bad credit and low credit scores
  • The mortgage industry went through major changes since the 2008 Real Estate and Mortgage Collapse
  • Predatory Lending is now illegal and in order for a loan officer to be able to refinance borrowers

Consumers need to get a net tangible benefit in order for the refinance mortgage process to proceed.

What Determines Mortgage Rates

Not every California borrower gets the same mortgage interest rates. Mortgage rates are determined by several factors.

Here are the factors that determine mortgage interest rates:

  • Borrowers credit scores: Lender view higher credit score borrowers as less risk
  • The higher the credit scores, the lower the mortgage interest rates

Property Type:

  • Single Family Homes are considered the less riskiest so it offers the lowest mortgage interest rates

Condos, townhomes, and two to four-unit properties are considered riskier so mortgage rates are higher

Down Payment on Conventional Loans:

  • Conventional Loans are not insured by the federal government
  • Lenders will offer lower rates to home buyers who put larger down payments on Conventional Loans

Private Mortgage Insurance

Any Conventional Loans with under 20% down payment require private mortgage insurance 

  • Premiums on private mortgage insurance (PMI) depends on borrower’s credit scores and the amount of the loan to the value of the property
  • Prior bad credit does not affect mortgage rates
  • Only credit scores affect mortgage interest rates
  • Prior bankruptcy, deed in lieu of foreclosure, foreclosure, short sales do not affect mortgage rates

California refinance borrowers need to consider locking their mortgage rates as soon as possible.

  • After the election of President Donald Trump, mortgage rates are extremely volatile with major daily swings
  • Not locking in the mortgage rate is called letting rates float where in the event mortgage rates skyrocket, the refinance process will be dead
  • Loan officers should pay attention to mortgage interest rates and lock borrowers who are refinancing as soon as possible

In the event, if there is a closing delay, lenders can grant extensions on mortgage locks

FHA Loans With Bad Credit In California

FHA Loans are the most popular loan program in California. The Federal Housing Administration (FHA) is a government agency under the umbrella of the U.S. Housing and Urban Development (HUD).

  • FHA does not originate nor fund FHA Loans
  • FHA’s function is to promote homeownership in the United States by insuring banks and private lenders on the home loans that they originate and fund that meet HUD Guidelines
  • In the event, if borrower defaults on their FHA insured home loan, HUD will guarantee the loss to the bank or mortgage company that funded the FHA Loan
  • This only holds true as long as the lender met all HUD Guidelines

FHA is the best Bad Credit Mortgage Loans California with only a 3.5% down payment required.

Here are the basic FHA Guidelines

FHA Guidelines

Minimum credit score requirement of 580 FICO for 3.5% down payment home purchase loan:

  • Maximum debt to income ratio requirements is 56.9% for borrowers with 620 credit scores or higher
  • Under 620 FICO borrowers, the maximum debt to income ratio is capped at 43% DTI
  • Outstanding collections and charge off accounts do not have to be paid
  • Co-borrowers allowed
  • 100% gifted funds can be used for a down payment on a home purchase
  • 2 year waiting period after Chapter 7 discharged date
  • Borrowers can qualify for FHA Loan one year into Chapter 13 Bankruptcy repayment plan with trustee approval
  • No waiting period after Chapter 13 discharged date

There is a three-year waiting period after foreclosure, deed in lieu of foreclosure, short sale.

What Are NON-QM Loans?

NON-QM Loans is a very popular mortgage program where there is no waiting period after bankruptcy and foreclosure to qualify for home loans.

Gustan Cho Associates now offers bank statement mortgage loans for self-employed borrowers. No tax returns are required. Personal and/or business bank statements are used to derive income

100% of deposits over 24 months is averaged on personal bank statements. 50% of deposits are averaged on business bank statements

Here are the benefits of NON-QM Loans:

No waiting period after bankruptcy, foreclosure, deed in lieu of foreclosure, short sale:

  • Bank statement loans are for self employed borrowers with  a lot of write-offs
  • Borrowers can qualify with our bank statement loan program where write-offs on tax returns do not matter
  • Available for both owner occupant and non-owner occupant investment properties

No Doc Fix And Flip Loans For Real Estate Investors

Gustan Cho Associates offers the no-doc fix and flip loan program for real estate investors.

Here is how our no doc fix and flip loan program works

no doc fix and flip loan program

Borrower’s income does not matter so there is no debt to income ratio requirements:

  • Only the property is underwritten and not the borrower
  • 15% down payment on the property purchase and 10% down payment on the rehab costs
  • 2 to 3-week closings
  • Can close on the name of LLC or borrower
  • 9-month interest-only term
  • Extensions can be given in the event of delays with a construction project
  • Minimum $100,000 loan amount and no maximum loan amount

Borrowers with bad credit or higher debt to income ratios can now qualify for mortgages. Please contact Gustan Cho Associates at 262-716-8151 or text for a faster response. Or email us mortgage inquiries at [email protected]

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