Mortgage Qualifications: Mortgage Borrowers
There are many case scenarios from mortgage loan borrowers. To qualify for a residential mortgage loan, there are two extremely important things that a borrower needs: Income and credit. Income is probably the most important factor and a total must. Credit? Credit is super important as well, however, if you have bad credit, we can work on helping you improve your credit so you can qualify for a residential mortgage loan. As long as you have income, you will get a residential mortgage loan. If you have income but bad credit, you will get a mortgage loan: The key is when you will get it and if you will get a mortgage. However, if you have excellent credit but no income, you will not qualify for a mortgage loan until you have a stable income source and that income source will likely to continue for the next three consecutive years.
Mortgage Lending Guidelines
Income and credit is not the only requirements for a mortgage loan borrower to secure a residential mortgage loan. The borrower needs to meet the federally mandated mortgage lending guidelines for the mortgage loan program they apply for: FHA, VA, USDA, HomePath, Fannie Mae, Freddie Mac, portfolio, Jumbo, or other mortgage loan programs. Every mortgage loan program have two sets of mortgage lending guidelines: The federal guidelines and the internal mortgage lender overlay guidelines.
Mortgage Lender Overlays
Just because you meet the required federal mandatory lending guidelines for a mortgage loan does not mean that you are home free because each mortgage lender might have their own internal mortgage lender overlays, which are additional extra guidelines on top of the federal guidelines. For example, FHA only requires a 580 FICO score for a borrower to qualify for a 3.5% down payment mortgage loan. However, a bank might require a 640 FICO score which is 60 FICO points above the federally required minimum credit scores of 580 FICO. There are mortgage lenders like myself where I represent wholesale mortgage lenders with no overlays and whatever the federal minimum requirements are will be your mortgage loan approval. If you are looking for a mortgage lender in Illinois, Florida, Wisconsin, Indiana, or California with no mortgage lender overlays, please contact me 262-716-8151 or at www.gustancho.com.
I get calls everyday from folks who have unique case scenarios and who are interested in purchasing a home. I will be covering individual unique case scenarios in future blogs. Some examples of case scenarios we will be covering are the following:
1. Quitting job during mortgage approval process.
3. Recent late payments.
4. Open collections.
6. Tax liens.
7. Divorce during mortgage loan process where future ex spouse refuses to sign paperwork.
8. Currently living on a home that is under spouse’s name but need to qualify for a new mortgage loan: Case of where mortgage lenders can classify as a bail.
9. Inheriting a home that is under foreclosure.
10. Timeshare foreclosure.
11. Back to work extenuating circumstances due to an economic event: Many case scenarios.
12. High debt to income ratios and solutions.
13. Waiting periods after bankruptcy, foreclosure, deed in lieu of foreclosure, short sale.
14. Foreclosure part of bankruptcy.
15. Late payments after bankruptcy and foreclosure.
16. Open collections, charge offs, late payments.
17. What constitutes a mortgage bail?
18. Mortgage lender overlays.
19. Bad credit, no credit, no credit scores and the use of non traditional credit.
20. Low appraisal, appraisal rebuttal, appraisal review.
21. Sellers concessions and lender’s credit toward closing costs.
22. Our new Home Buyers Preparation Program for home buyers with real bad credit and very poor credit history.