Under 580 Fico Scores mortgage approvals; Bad credit mortgage loans

Bad Credit Home Mortgages

Bad Credit Mortgage Loans

Home buyers who have credit scores between 530 and 580 FICO credit scores can still qualify for a mortgage loan.  However, if your credit scores fall between 530 and 580, the minimum down payment required is 10% versus the normal 3.5% down payment required for the traditional FHA loan.  There are other criteria that will be taken into consideration prior for a mortgage lender to approve a borrower with FICO scores under 580.

Other factors for borrowers under 580 FICO

Mortgage lenders who specialize in bad credit mortgage loans like to see no late payments in the past 12 months.  They also do not like to see late payments after a bankruptcy and/or foreclosure.  Other factors they frown upon are overdrafts in the past 12 months.   Mortgage lenders also want to see three established credit tradelines that is at least one year old.  In the event if the borrower does not have three credit tradelines, some mortgage lenders who specialize in bad credit mortgage loans will take non traditional tradelines such as utility payment history, rental verification, or cell phone payment history.

Verification Of Rent

Mortgage lenders who specialize in bad credit mortgage loans want to see one year verification of rent.  Verification Of Rent is proven by 12 months of cancelled checks if your landlord is not a property management company.  A letter from a licensed property management company could be used as proof of rental verification.  If you are renting your apartment or home from an individual, cancelled checks will be required as proof of rental verification.   In the event you do not have rental verification because you pay your monthly housing expenses with cash or live with family, you can still get a mortgage approval but your debt to income ratio requirements might be stricter.

Mortgage lenders that specialize in bad credit mortgage loans

Banks normally do not deal with bad credit mortgage loans.  If your credit scores are under 580 FICO, you need to consult with a mortgage broker that specialize in bad credit mortgage loans.  You mortgage broker will ask you to complete a 1003 mortgage application and will run a credit check.  If you are close to a 580 FICO credit score, your mortgage broker might help you boost your credit scores so you can qualify for a 3.5% down payment FHA loan versus having to put down a 10% down payment.

Please contact Gustan Cho Associates at 262-716-8151 or email us at gcho@gustancho.com.  You can also subscribe to our daily mortgage and real estate newsletter at  www.gustancho.com.   If you are looking for a mortgage lender that specializes in bad credit mortgage loans in your state please contact us.  Gustan Cho can help you get a mortgage approval in California, Indiana, Illinois or Florida as well as in other states.

Related> Bad Credit Mortgage Loans: FHA Loans To The Rescue

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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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