In this article, we will cover and discuss qualifying for FHA loans with 580 FICO in West Virginia and getting mortgage loan approval. Not all FHA Mortgage Lenders have the same lending guidelines on FHA loans with 580 FICO in West Virginia. Most lenders in West Virginia have mortgage overlays which are additional guidelines that are above and beyond those of HUD Minimum Guidelines. Gustan Cho Associates are experts in originating FHA with 580 FICO in West Virginia with no lender overlays.
Lending Requirements on FHA Loans With 580 FICO in West Virginia by Mortgage Lenders
Here are common mortgage overlays imposed by West Virginia mortgage lenders:
- Overlays On Credit Scores
- Overlays On Debt To Income Ratio
- Overlays On Collections And Charge Off Accounts
- Overlays In Qualifying For FHA Loans During And After Chapter 13 Bankruptcy
- Verification Of Rent
In this article, we will cover and discuss the difference in qualifying for FHA loans with 580 FICO in West Virginia by lenders with no overlays versus mortgage lenders with overlays on credit scores.
Qualifying For FHA Loans 580 FICO in West Virginia versus 620 Credit Scores
Over 75% of our borrowers at Gustan Cho Associates are folks who either have gotten a last-minute loan denial or cannot qualify with a current lender due to the overlays the lender has. Many home buyers are told that they do not qualify for FHA loans with 580 FICO in West Virginia versus 620 credit scores. Most banks will require 640 scores while most smaller mortgage companies require 620 credit scores. This holds true even though FHA only requires 580. For borrowers to qualify for a 3.5% down payment residential FHA Loan, the minimum credit score required is 580. A lender with no overlays can get borrowers with credit scores of 580 scores approved for FHA Loans all day long. This holds true as long as the borrower can get an automated approval per Automated Underwriting System.
Debt To Income Ratio On FHA Loans With 580 FICO versus 620 FICO
Borrowers will lower credit scores will be capped at a lower debt to income ratio to get an approve/eligible per AUS FINDINGS. There are negatives with under 620 credit score borrowers. Credit scores between 580 and 619 the back end debt to income ratios will be capped at 43% to get an approve/eligible per AUS.
Typical Lender Overlays by Lenders on FHA Loans With 580 FICO in West Virginia
The debt to income ratio cap is much greater for borrowers who have credit scores 620 versus 580. We will discuss later on this blog. With credit scores under 620, mortgage rates will be higher. The automated underwriting system may require rental verification if credit scores are under 620. VOR may or may not be required depending on what the Automated Underwriting Systems comes back with.
How Can I Qualify For FHA Loans With 580 FICO in West Virginia
If credit scores fall between 500 and 579 scores, borrowers can still get approved for FHA loans. However, under HUD Guidelines, 10% down payment is required on a home purchase for borrowers with under 580 credit:
Getting Automated Underwriting System Approval on FHA Loans With 580 FICO in West Virginia
The Automated Underwriting System Findings may require other conditions on findings with lower credit scores borrowers such as the following:
- Rental verification
- No gift funds
- Higher mortgage rates
Borrowers with credit scores just slightly under 580 might want to have their mortgage loan originator help them boost up their credit scores over the 580 thresholds before starting the mortgage process.
FHA Loans 580 Versus 620 Credit Scores And Difference In DTI Requirements
Comparison of FHA Loans With 580 FICO in West Virginia Versus 620 Credit Scores.
- One of the greatest benefits besides the 3.5% down payment is that the back end debt to income ratios are capped at 56.9% and the front end debt to income ratios is capped at 46.9% with borrowers who have at least a 620 credit score or higher
- Rental verification is not required and mortgage rates are lower with over 620 scores
For borrowers who fall short of the 620 score threshold and have higher debt to income ratios, it will be worthwhile to work with mortgage loan originators in trying to boost credit scores over the 620 thresholds.
Mortgage Lender Overlays on FHA Loans With 580 FICO in West Virginia
Gustan Cho Associates is a mortgage broker licensed in 48 states with no overlays on government and conventional loans. Gustan Cho Associates has a large presence in West Virginia. Many lenders have their own overlays where they have their own cutoff credit scores such as 640. However, the 640 credit score requirement is not federal lending guidelines but the lender’s own lending guidelines. It is unfortunate many borrowers and professional real estate agents do not know this.
No Need To Shop For FHA Loans With 580 FICO in West Virginia: Gustan Cho Associates Can Help
It is sad that many borrowers and realtors give up just because the borrower got denied for a mortgage loan. I originate and close on residential mortgage loans with credit scores under 620 FICO every month. Borrowers can have lower credit scores, prior bad credit, and other periods of bad credit history and get approved for a mortgage loan. Homebuyers who have been told NO for having lower credit scores, open collections, or prior bad credit please contact me at 800-900-8569 or text us for a faster response
Or visit us at www.gustancho.com.
Qualifying For FHA Loans With 580 FICO in West Virginia With Lender With Lenient Guidelines
Borrowers with prior bad credit and/or had a prior bankruptcy, foreclosure, deed in lieu of foreclosure, or short sale, can contact us at Gustan Cho Associates at 800-900-8569 or text us for faster response. Or email us at firstname.lastname@example.org. We are available 7 days a week, evenings, weekends, and holidays. Gustan Cho Associates are national lenders with no mortgage overlays on government and/or conventional loans.
May 10, 2022 - 4 min read