FHA Loans With Under 620 Credit Scores Mortgage Guidelines
This BLOG On FHA Loans With Under 620 Credit Scores Mortgage Guidelines Was UPDATED On January 21st, 2019
Over 75% of our borrowers at Gustan Cho Associates Mortgage Group are folks who either gotten a last minute loan denial or are stressing over their mortgage process for one reason and one reason only:
- The borrower was not properly qualified by their other lenders
- Why is it that lenders have different credit score requirements
- Most banks will require a 640 credit score while most lenders will only take mortgage applicants who have 620 credit scores
- However, the U.S. Department of Housing and Urban Development (HUD), the parent of FHA, sets the minimum credit score at 580 for borrowers to qualify for 3.5% down payment home purchase FHA Loans
- Lenders can have different credit score requirements that are above and beyond FHA minimum credit score requirements
Home Buyers can qualify for FHA Loans With Under 620 credit scores.
Where Can I Qualify For FHA Loans With Under 620 Credit Scores
If you are a borrower and need to qualify for FHA Loans With Under 620 credit scores, the lender of choice needs to be a direct lender with no overlays. Gustan Cho Associates is a national lender with no overlays on government and conventional loans. We cater to borrowers trying to qualify for FHA Loans With Under 620 Credit Scores. Home Buyers having a hard time getting approved for FHA Loans with under 620 credit scores have come to the right website and are in luck.
- As long as credit scores are at least 580 scores, borrowers will qualify for FHA Loans
- Back end debt to income ratios does not exceed 43% to get approved/eligible for FHA Loans With Under 620 Credit Scores
If credit scores are over 620 FICO, then front end DTI can be capped at 46.9% and back end debt to income ratios are capped at 56.9% to get approve/eligible per AUS.
FHA Guidelines On Under 620 Credit Score Borrowers
Most lenders do have their own mortgage lending guidelines which are called lender overlays. Many lenders have overlays on credit scores between 620 and 640 credit scores.
- Higher credit score requirements like 620 to 640 is not an FHA mortgage lending guideline
- They are lender’s own mortgage lender overlay
- FHA only requires that the borrower have a 580 FICO score to qualify for a 3.5% down payment FHA Loan
- The good news is that Gustan Cho Associates helps borrowers get approved for FHA Loans With with under 620 credit scores
- Gustan Cho Associates is a national lender with no overlays
As long as the borrower can get an Automated Underwriting System mortgage approval, we can close the loan.
Can I Qualify For FHA Loans With Under 620 Credit Scores And Collections
The Federal Housing Administration does not require that open collections be paid off.
Charge offs are allowed and older late payments are acceptable.
- However, recent late payments can be a problem
- Mortgage underwriters do not want to see any late payments in the past 12 months
- Any late payments in the past 12 months are frowned upon
- However, it is not a deal killer if there were extenuating circumstances for the late payment
- Never pay off an older collection account because it will plummet credit scores
- This is because it re-activates the derogatory credit item as a fresh derogatory
Information on the credit reports and payment history will be taken into account by the Automated Underwriting System prior to a decision.
What Will The AUS Take Into Account
Again, the Automated Underwriting System will take into account the following prior to rending an AUS Approval:
- Credit history
- Credit scores
Contact Us If Told You Do Not Qualify For A Home Loan By Other Lenders
Again, borrowers who are told no by a bank, mortgage banker, or mortgage broker that they do not qualify for a mortgage, please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at firstname.lastname@example.org. A larger percentage of our borrowers have under 620 credit scores. 100% of our borrowers close on their mortgage loans once they get an approved eligible per DU or LP FINDINGS. All of our pre-approvals are full credit approvals underwritten and signed off by our mortgage underwriters.