Alex Carlucci The Mortgage Expert,
Publish On: June 2, 2022
In this blog, we will cover and discuss the best bad credit mortgage lenders in Alaska for FHA loans. The housing market in Alaska is booming. Homes are selling the day they are listed. During these volatile economic times with mortgage rates surging, many homebuyers with lower credit scores are shopping for the best bad credit mortgage lenders in Alaska for FHA loans. FHA loans are the best mortgage option for borrowers with less than perfect credit in Alaska.
FHA Loans With 500 FICO in Alaska
FHA loans are the best mortgage loans for homebuyers with bad credit, low credit scores, and high debt to income ratio. We will cover other mortgage loans for bad credit borrowers. FHA loans allow for a low down payment with lenient lending guidelines at competitive rates. Understanding FHA loans and other loan programs are important for homebuyers and homeowners thinking of buying or refinancing a home in Alaska. There are several types of loan programs. Many homebuyers do not know the various differences in the types of loan programs they can choose from. We will cover FHA, VA, and non-QM loans for bad credit in Alaska in this blog.
What Is The Credit Score I Need To Buy a House in Alaska?
Gustan Cho Associates has no lender overlays on government and conventional loans. We are experts in helping homebuyers with bad credit qualify for a mortgage. We explore the many mortgage options for our borrowers so they can get the best mortgage program with the best term and rates. FHA, VA and non-QM loans all allow borrowers with credit scores down to 500 FICO to qualify for mortgage loans.
Buying a House With Bad Credit in Alaska
There are instances where conventional loans are a better option for home buyers. Other times, an FHA loan may be a better option than an FHA loan. Most borrowers are not familiar with loan programs and how the mortgage process works. Take the time to understand and learn the basics of home mortgage programs. In this article, we will be covering qualifying for a mortgage with the best bad credit mortgage lenders in Alaska.
What Is The Best Mortgage To Buy House In Alaska With Bad Credit?
There are hundreds of non-QM and non-prime mortgage loan programs. There is every type of non-QM loan program in Alaska for every type of borrower. However, non-QM loans require a 20% or higher down payment. VA, FHA, and Conventional loans have mortgage programs for bad credit. FHA and VA loans allow homebuyers with credit scores down to 500 FICO to be eligible for mortgage loans. FHA loans are the most popular loan program in Alaska. This is because close to 40% of all home mortgages in the nation are FHA loans.
FHA Loans For Bad Credit in Alaska
The two most popular loan programs in the U.S. are FHA and Conventional loans. In this article, we will discuss and cover Understanding FHA Loans And The Eligibility Requirements. VA loans are a great mortgage option for homebuyers with bad credit and low credit scores in Alaska. VA loans do not have minimum credit score requirements or debt-to-income ratio limits. VA loans do not have a maximum loan limit. There is no mortgage insurance requirement on VA loans. Lenders aggressively pursue marketing VA loans with no money down, no mortgage insurance, and at competitive rates. However, not everyone can qualify for VA loans. Only eligible active and/or retired members of the U.S Military are eligible.
Do All Lenders Have The Same Mortgage Requirements in Alaska
One of the most frequently asked questions at Gustan Cho Associates is do all lenders have the same lending guidelines on FHA loans? This is a great question. The answer is NO. Let us explain to you how FHA lending requirements by lenders work to grasp a better understanding of how FHA loans work. All lenders need to have their borrowers meet the minimum HUD Guidelines on FHA loans. However, lenders can have higher lending requirements that are above and beyond the minimum lending requirements by HUD.
Can I Buy A House With Good Income But Bad Credit in Alaska
These additional higher lending requirements by lenders are called lender overlays. Lender overlays vary from lender to lender. For example, the minimum credit score required on a 3.5% down payment home purchase FHA loan is 580 FICO. However, some lenders may require 620, 640, 660, or 680 credit scores due to their lender overlays. Borrowers with higher credit scores can normally get approved by any lender. However, if you are a borrower with lower credit scores, prior bad credit, and high debt to income ratios, you may need to go to a lender with no overlays like Gustan Cho Associates. Gustan Cho Associates is a five-star mortgage broker with no lender overlays on FHA, VA, USDA, and Conventional loans. Over 75% of our borrowers at Gustan Cho Associates are folks that could not qualify at other lenders due to their lender overlays.
How Can I Qualify For an FHA Loan with Low Scores in Alaska?
In this paragraph, we will discuss the basic minimum HUD Agency Mortgage Guidelines on FHA loans. Again, all lenders need to have their borrowers meet the minimum HUD Agency Guidelines. The minimum HUD agency guidelines on the minimum credit score requirements is 500 FICO. However, lenders can have higher lending requirements called lender overlays. A lender can have lender overlays on just about anything. A lender can ask for higher credit score requirements, lower debt to income ratio, collections to be paid than the minimum HUD guidelines on FHA loans. If you meet the minimum guidelines below, you will qualify for an FHA loan with a lender with no overlays such as Gustan Cho Associates.
HUD Down Payment Guidelines on FHA Loans in Alaska
HUD, the parent of FHA, sets the minimum agency mortgage guidelines on FHA loans. To qualify for a 3.5% down payment home purchase FHA loan, the borrower needs a 580 credit score. Borrowers with credit scores between 500 to 579 FICO are eligible to qualify for an FHA loan with an approve/eligible per automated underwriting system (AUS) with a 10% down payment. To get an approve/eligible per AUS, the borrower needs a maximum of 46.9% front end and 56.9% back end debt to income ratio.
FHA Loans After Chapter 7 Bankruptcy in Alaska
Borrowers can qualify for an FHA loan after bankruptcy. There is a two-year waiting period after the Chapter 7 Bankruptcy discharged date to qualify for an FHA loan in Alaska. You should have no late payments after bankruptcy discharge and have re-established credit. The best and easiest way to reestablish credit after bankruptcy is by getting three secured credit cards. You should get each secured credit card with $500 limits for maximum effect. The team at Gustan Cho Associates has helped countless folks increase their credit scores over 700 FICO in less than one year from the discharge date of their bankruptcy.
FHA Loans After Foreclosure and/or Housing Event in Alaska
There is a three-year waiting period after foreclosure, a deed in lieu of foreclosure, and a short sale. The waiting period start date begins the date the deed of the property was transferred out of the homeowner’s name to the name of the new owner. It can be the lender and/or new owner of record. Or the date of the sheriff’s sale. The beginning date of the waiting period after a short sale is the date of the short sale reflected on the closing disclosure. There are instances where the property has not transferred title for years in Alaska. In such cases, the waiting period has not yet started. Gustan Cho Associates has non-QM mortgages one day out of bankruptcy and foreclosure with no waiting period.
FHA Loans During the Chapter 13 Bankruptcy in Alaska
Borrowers in an active Chapter 13 Bankruptcy repayment plan can qualify for an FHA loans loan during the Chapter 13 repayment period. It needs to be one year into the plan with Trustee Approval. The file needs to be manual underwriting. The manual underwriting debt-to-income ratio guidelines on FHA loans are as follows: 31/43% with no compensating factors, 37%/47% with one compensating factor, and 40%/50% with two compensating factors. Chapter 13 Bankruptcy does not have to be discharged. Many borrowers worry about getting approval from the Bankruptcy Trustee. Most trustees will approve a home purchase and/or refinance as long as the person is able and can afford it. Housing is a necessity for life and we have never ever seen a bankruptcy trustee deny a request.
FHA Guidelines After The Chapter 13 Bankruptcy in Alaska
There is no waiting period after the Chapter 13 Bankruptcy discharged date. However, any Chapter 13 Bankruptcy that has not been seasoned for at least two years needs to be manually underwritten. FHA and VA loans are the only two mortgage loan programs that allow manual underwriting. Manual underwriting is very similar to automated underwriting system approvals. However, with manual underwriting, you need timely payments in the past 24 months. Generally, you need timely payments in the past 12 months to get an approve/eligible per the automated underwriting system on FHA loans.
FHA Loans With Collections and Charged Off Accounts
Gustan Cho Associates, empowered by NEXA Mortgage, LLC is a mortgage broker licensed in 48 states with no lender overlays on FHA home mortgages. Outstanding Collections and Charged-Off Accounts do not have to be paid to qualify for FHA loans. However, 5% of the unpaid balance is used as a hypothetical debt payment towards debt to income ratio calculations by the mortgage underwriter on non-medical collection accounts. The 5% hypothetical debt calculation does not apply to charged-off accounts and medical collections. The exemption of the 5% rule on charged-off and hypothetical accounts holds true no matter how large of a balance the non-medical and/or charged-off account is.
VA Loans During Chapter 13 Bankruptcy in Alaska
Borrowers in an active Chapter 13 Bankruptcy repayment plan can qualify for VA loans during the Chapter 13 Bankruptcy repayment plan. The earliest borrowers can qualify for VA loans is one year into the plan with Trustee Approval and manual underwriting. The borrower needs to have made 12 timely payments. No late payments during the Chapter 13 Bankruptcy plan are allowed unless they were due to extenuating circumstances. Manual underwriting generally requires timely payments in the past 24 months on FHA and VA loans. However, VA loans have easier manual underwriting guidelines than FHA loans. The government really wants to take care of our veterans. We generally accept manual underwriting on VA loans with just 12 months of timely payments. VA loans during the Chapter 13 Bankruptcy repayment plan are for both purchase and refinance transactions.
VA Loans After Chapter 13 Bankruptcy in Alaska
There is no waiting period after the Chapter 13 Bankruptcy discharged date. However, any Chapter 13 Bankruptcy that has not been seasoned for at least two years needs to be manually underwritten. The only difference between AUS-approved versus manual underwriting is there is a front-end and back-end debt-to-income ratio cap on VA loans that are manually underwritten. The manual underwriting guidelines on the debt-to-income ratio on VA loans are as follows: 31/43% with no compensating factor, 37%/47% with one compensating factor, and 40%/50% with two compensating factors. Mortgage underwriters have a lot of underwriter discretion on manual underwriting and can make exceptions in favor of the borrowers. For example, a mortgage underwriter can use her discretion in approving a VA loan with up to 55% debt to income ratios because the underwriter sees strong compensating factors and strong residual income to support.
VA Loans With Collections and Charged Off Accounts in Alaska
Outstanding Collections and Charged-Off Accounts do not have to be paid to qualify for VA loans. On non-medical collections, 5% of the unpaid balance is used as a hypothetical debt payment towards debt to income ratio calculations by the mortgage underwriter. This only applies to non-medical collection accounts. The 5% hypothetical debt calculation does not apply to charged-off accounts and medical collections. The 5% hypothetical debt payment on non-medical collection accounts holds true no matter how large of a balance the non-medical and/or charged-off account is.
Best Bad Credit Mortgage Lenders in Alaska For Under 600 FICO
Gustan Cho Associates has other mortgage options on top of government and conventional loans for homebuyers in Alaska with bad credit. Both FHA and VA loans allow credit scores down to 500 FICO. Gustan Cho Associates offers a wide selection of non-QM loans in Alaska. We will cover non-QM loans and high-balance FHA loans, high-balance conforming loans, and high-balance VA jumbo loans later on in this article. The minimum credit score requirement to qualify for a 3.5% down payment FHA loan in Alaska is 580 FICO. Gustan Cho Associates tops the ranks in being able to do loans other lenders cannot do. We are one of the top Best Bad Credit Mortgage Lenders in Alaska for helping borrowers with credit issues.
Non-QM Loans in Alaska
Non-QM loans are alternative mortgage options for homebuyers in Alaska who either cannot qualify for traditional mortgages or needs a specialty niche alternative loan option. Gustan Cho Associates are mortgage brokers licensed in 48 states. We also have lending relationships with over 170 wholesale mortgage lenders. We have partnerships with the wholesale best bad credit mortgage lenders in Alaska. Some of our popular non-QM mortgage loan programs are no-doc mortgages, asset depletion, non-QM loans one day out of bankruptcy and/or foreclosure, late payments mortgages, stated-income mortgages, and hundreds of other mortgage loan programs.
FHA Down Payment Requirements For Homebuyers With Low Credit Scores in Alaska
However, borrowers with under 580 FICO and down to 500 are eligible to qualify for an FHA loan with 10% versus a 3.5% down payment. Per HUD guidelines, borrowers with credit scores down to 500 FICO can qualify for an FHA loan. This holds true as long as they can get an approve/eligible per the automated underwriting system. However, most lenders will not approve any borrowers with under 580 credit scores due to their lender overlays. However, Gustan Cho Associates are experts in approving and funding FHA loans with borrowers with under 580 credit scores. Gustan Cho Associates has no lender overlays on government and conventional loans
See the infographic chart below with regards to 580 FICO Versus Under 580 Credit Scores:
Credit Versus Timely Payment History
FHA loans are very popular due to HUD’s lenient credit guidelines. HUD, the parent of FHA, is always promoting homeownership. This holds true for first-time homebuyers and borrowers with less than perfect credit. Many homebuyers cannot believe that you can qualify for an FHA loan with credit scores as low as 500 FICO. However, all loan programs, including FHA loans, normally require timely payments in the past 12 months to get an approve/eligible per the automated underwriting system.
Mortgage Guidelines on Recent Late Payments in Alaska
One or two late payments may not always be a deal killer. One of the key points borrowers need to realize is that not all lenders have the same lending guidelines on FHA loans. Just because you get denied for an FHA loan by one lender does not mean you cannot qualify for an FHA loan with another lender. This, again, is due to the lender overlays each individual lender can impose. Just having a higher credit score does not automatically mean that you qualify for an FHA loan. Non-QM loans are a great mortgage option for homebuyers in Alaska who cannot get an approve/eligible per the automated underwriting system due to having late payments in the past 12 months.
How Does the Automated Underwriting System Work
The automated underwriting system is a sophisticated highly-technological computerized system. The automated underwriting system will analyze a borrower’s data and render an automated underwriting system approval and/or rejection within seconds. One of the key factors in getting an automated underwriting system approval is being timely in the past 12 months. The chances are much higher for a borrower with lower credit scores with timely payments in the past 12 months to get an automated approval than a borrower with higher credit scores BUT late payments in the past 12 months.
Do All Lenders Have The Same Requirements on FHA Loans?
The role and mission of HUD are to promote homeownership by insuring FHA loans. FHA loans are originated, processed, underwritten, and funded by lenders. Due to the government guarantee, lenders aggressively offer FHA loans with a 3.5% down payment for borrowers with less than perfect credit or first-time homebuyers at great mortgage rates. In the event, that the homeowner defaults and forecloses on their FHA loans, HUD will insure and/or partially guarantee the loss.
Maximum FHA Loan Limit in Alaska
The housing market is booming in the U.S. The housing market has been booming before the coronavirus pandemic hit the nation. Housing prices were skyrocketing year after year. Both HUD and the Federal Housing Finance Agency (FHFA) have been increasing FHA and Conventional loan limits year after year for the past four years. Once the COVID-19 pandemic hit the nation, many experts and analysts expected there was going to be another housing crisis worse than the 2008 financial crisis and housing meltdown. However, the housing market kept on booming despite the coronavirus pandemic. Even with 50 million Americans out of work, the housing market remains stronger than ever.
Mortgage rates hit a historic high last week. 30-year fixed-rate mortgages are now at 5.96%. There is more demand for housing than inventory. Homebuilders are setting record revenues. HUD increased its 2022 FHA loan limit to $420,680 in low-cost areas and $970,800 in high-cost counties as of Jan. 1st, 2022. The FHFA increased 2022 conforming loan limits to $647,200 due to skyrocketing home prices in standard areas and $970,800 in high-cost counties. The VA removed the maximum loan limits on VA loans effective January 1st, 2020.
Mortgage Insurance on FHA MIP Versus Conventional Loan PMI in Alaska
No matter how much down payment you put down on an FHA loan, borrowers will need to pay an annual FHA mortgage insurance premium for the life of the 30-year fixed-rate FHA loan. FHA mortgage insurance premium is mandatory on all FHA loans. This holds true regardless of how much the loan to value is. There are two types of mortgage insurance on FHA loans. The one-time upfront mortgage insurance premium of 1.75% is charged to every borrower on FHA loans. The 1.75% upfront FHA mortgage insurance premium is normally rolled into the balance of the FHA loan balance. The second type of mortgage insurance premium is the annual 0.85% annual FHA mortgage insurance premium. The annual FHA MIP is calculated into 12 monthly installments and is escrowed by the lender.
Best Bad Credit Mortgage Lenders in Alaska For Conforming and FHA Loans
There are pros and cons of FHA versus Conventional Home Mortgages. In general, FHA loans are easier to qualify for borrowers with bad credit and lower credit scores. The minimum credit score for FHA loans is 500 FICO. However, the minimum credit score requirements on conventional loans are 620 FICO. FHA loans are for owner-occupant primary homes only.
Second Home and Investment Property Mortgages With Bad Credit in Alaska
Conventional loans allow second home and investment property financing. However, one of the biggest benefits of going with conventional versus FHA loans is when a borrower has a prior mortgage included in their bankruptcy. The waiting period after bankruptcy on conventional loans if they have a mortgage included in bankruptcy is four years from the discharge date of the bankruptcy. The date of foreclosure, deed in lieu of foreclosure, or a short sale does not matter. This guideline is on conventional loans only.
FHA Waiting Period Guidelines on Prior Mortgage Included in Bankruptcy
On FHA loans, there is a three-year waiting period after the recorded date of the foreclosure, deed in lieu of foreclosure, and a short sale in cases where a mortgage was included in the bankruptcy. The date of the bankruptcy discharged date does not matter on FHA loans in cases where a mortgage was included in bankruptcy.
Mortgage Guidelines on High Student Loan Balances
Another reason why borrowers needed to use conventional versus FHA loans is when they have high student loan balances prior to HUD changing the student loan guidelines on FHA loans. Fannie Mae and Freddie Mac was the only loan program allowing Income-Based Repayment (IBR PAYMENTS) on conventional loans. HUD now also allows income-based repayment on FHA loans. On FHA loans, HUD requires 0.50% of the outstanding balance to be used as a hypothetical debt. Deferred student loans that have been deferred for longer than 12 months are no longer exempt from FHA loans.
It is easier to get an approve/eligible per automated underwriting system on FHA versus Conventional loans. Many borrowers with larger collection and charged-off accounts can benefit more from getting automated underwriting system findings on an FHA versus a conventional loan.
HUD Property Type Guidelines on FHA Loans in Alaska
FHA loans are only for owner-occupant primary residences. This also holds true for other government loan programs. Government loans are only for owner-occupant primary homes. You cannot purchase a second home and/or investment property with an FHA loan. For homebuyers who need to purchase a second home and/or investment home, then you need to qualify with a conventional loan or other alternative home mortgage program.
Types Of Properties That Are Eligible For FHA Financing in Alaska
Here are the types of properties that are eligible for FHA financing:
- Detached single-family homes
- Manufactured homes are eligible as long as the home sits on a concrete foundation
- Townhomes and PUDs
- Condominiums that are in HUD-Approved Complexes
FHA Guidelines on Condominiums in Alaska
Condo buyers who find a condominium unit they are interested in purchasing but the condo complex is not HUD-approved can now qualify for the unit via FHA Spot Loans. FHA Spot Loans is a special program from HUD that allows an exception for a condo buyer who is eligible to purchase a condominium in a non-HUD-Approved Condo Complex.
Best Bad Credit Mortgage Lenders in Alaska With Competitive Rates
If you are shopping for the very Best Bad Credit Mortgage Lenders in Alaska, look no further. Our track record speaks for itself. We have gotten thousands of compliments from borrowers, realtors, attorneys, title agents, insurance agents, and viewers about how the team at Gustan Cho Associates are the best bad credit mortgage lenders in Alaska as well as the 48 states the team is licensed in. The best bad credit mortgage lenders in Alaska should not just be able to get the borrower approved, but the best bad credit mortgage lenders in Alaska should be able to offer the borrowers the best rate.
What Is The Highest Mortgage Rates For Bad Credit In Alaska
Many bad credit mortgage brokers take advantage of the situation of the borrower’s bad credit and charge as high as they can legally do so. This includes high rates and discount points. That is not how the team at Gustan Cho Associates operates. Gustan Cho Associates strives to be the best of the best bad credit mortgage lenders in Alaska not just because we can do the mortgage but because we can approve and close the mortgage at the best possible rate for the borrowers.
Conclusion: Our Mission Statement of Gustan Cho Associates To Our Team and Clients
Our foundation is to take care of the customers, and the customers will take care of us. We rather make ten cents of a dollar on millions than 90 cents of the dollar on nothing. Our loan officers all share in the Gustan Cho Associates Core Business Model:
Our Mission Statement For Our Loan Officers at Gustan Cho Associates: Do not be a loan officer because you want to make millions, you will never succeed, you will be miserable, and not last in the mortgage business for long. You work at Gustan Cho Associates because you want to help families realize the American Dream of Homeownership Become a Reality. No matter how small or large the loan amount is, you do the best of the very best you can. You work as a loan officer at Gustan Cho Associates because you are an important part of helping people realize their dream of homeownership becoming a reality. You work for knowing you had a part in making a family unite in a place called HOME. I have closed hundreds of loans over the years. I still get cards, Starbucks gift certificates, photos, and letters from previous borrowers still remembering me and grateful for having their home. Being part of helping families go to the next level is a priceless reward. No money in the world can buy that. You will make money as a loan officer. Work your ass off and treat every borrower like family and you will get rewarded. Don’t follow the money, the money will follow you. The money is your report card.
To qualify for a mortgage with a five-star national mortgage company licensed in multiple states with no lender overlays on government and conventional loans, please contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. The team at Gustan Cho Associates is available 7 days a week, on evenings, weekends, and holidays. The team at Gustan Cho Associates strives to be one of the Best Bad Credit Mortgage Lenders in Alaska with the best mortgage rates in the market.
