Qualifying For Florida Bad Credit Mortgage Loans With No Lender Overlays

This BLOG On Florida Bad Credit Mortgage Loans Was Written By Gustan Cho NMLS 873293 

Florida was one of the states that was hit very hard by the Great Recession of 2008 which affected property values throughout the state.
  • Home values that once appreciated double digits every year plummeted and a large percentage of homeowners were left with mortgage balances higher than their home values.
  • Record foreclosure numbers left many with bankruptcies, foreclosures, and short sales.
  • Fortunately, the housing market started recovering in 2011 and today, Florida is back to being one of the hottest states where there is a shortage of homes than the demand of home buyers.
  • Folks who lost their homes back in 2008 to 2012 have passed their waiting periods after foreclosure and bankruptcy and now qualify for Florida
  • Bad Credit Mortgage Loans and qualified for home loans and became homeowners again.
  • Others have stayed on the sidelines and are looking for homes to purchase.
  • With the major changes in mortgage lending guidelines, home buyers in Florida can now qualify for Florida Bad Credit Mortgage Loans again.

Importance Of Credit

Most Americans live on credit. Credit affects every single American in more than one aspect.
  • Americans take out mortgage loans, auto loans, student loans, installment loans, personal loans, business loans, and use credit cards.
  • However, many who have fell victims of the 2008 Real Estate and Credit Collapse decided not to obtain credit and pay everything with cash.
  • Unfortunately, one of the main reasons why consumers have low credit scores is because they have no active credit accounts, especially revolving accounts which are credit card accounts.
  • Consumers can have credit scores in the 500’s not because they have not been paying their bills but because they have no re-established credit.

Credit Scores Versus Credit History

 Florida mortgage lenders will not just view credit scores but will review the overall credit report of mortgage applicants with emphasis on two factors:
  • Last 12 months payment history of borrower
  • Late Payments After Bankruptcy, Foreclosures, Deed In Lieu Of Foreclosure, Short Sale

How Underwriters Analyze Credit

When consumers resort to credit, credit reports and credit scores is the factor that comes into play on the interest rates they will pay or whether they are granted credit or not.
  • Most lenders give the most weight on credit scores in making a determination on whether to grant credit to mortgage loan borrowers. 
  • Other factors such as income, debt, and assets do come into play along with credit scores.
  • Credit scores are the deciding factor with most creditors, especially mortgage lenders whether or not they are going to proceed with the credit approval process.
  • If a borrower or consumer has bad credit or a certain credit score that does not meet the lender or creditor’s criteria, the credit process does not go any further.
  • However, if the credit and credit scores meet the minimum credit guidelines and requirements of the creditor and/or lender, the credit and/or loan process then proceeds to the next level.

Minimum Credit Scores To Qualify For Florida Bad Credit Mortgage Loans

The Gustan Cho Team are specialists in helping Florida home buyers get qualified for Florida Bad Credit Mortgage Loans.

  • We are licensed to do business in multiple states a large percentage of our borrowers are Florida home buyers and Florida homeowners needing refinancing with no closing costs.
  • Our loan officers at The Gustan Cho Team has five star national reputation in both service and closing loans in 21 days or less and our business model is no overlays on government loans and Conventional Loans.
  • The Gustan Cho Team is known nationally of being one of the most aggressive Florida Bad Credit Mortgage Professionals.

Here are the minimum credit score requirements for home purchase loans:

  • To qualify for a 3.5% down payment FHA Loan with no lender overlays requires a 580 FICO Credit Score.
  • There are no overlays on VA Loans.
  • Conventional Loans require a 620 FICO Credit Score.
  • USDA Loans have a 580 FICO Requirement.

How Lenders Determine Risk Level Of Borrowers

  • Credit Score of 760 to 850 is classified as having an excellent credit score.
  • Credit Score of 700 to 759 is classified as a great credit score.
  • Credit Score of 660 to 699 is classified as a good credit score.
  • Credit Score of 580 to 659 is classified as a fair credit score.
  • Credit Score below 580 is classified as a poor credit score.

Borrowers With High Credit Scores

If you have excellent credit scores, you can rest assured you will qualify for any type of credit you apply depending on your income.
  • You should have no problem getting approved for credit cards, auto loans, and mortgages.
  • Most lenders classify a person with a credit score above 740 FICO credit score as a premium credit borrower and will treat anyone with a 740 credit score or higher the same as a someone who has a 850 credit score.

Florida Bad Credit Mortgage Loans: Borrowers With Under 620 FICO Credit Scores

Credit scores below 620 FICO are considered by lenders to be risky borrowers and the chances are that a borrower with this credit score will be paying a higher interest rate and viewed less favorably by lenders.
  • The Gustan Cho Team specializes in helping borrowers with under 620 FICO credit scores.
  • Borrowers with credit scores in the 580 to 619 range and are having a difficult time, contact The Gustan Cho Team.
  • A large percentage of our borrowers have under 600 credit scores.
  • FHA requires a 580 FICO for a 3.5% down payment FHA home insured mortgage loan but most lenders require a higher credit score due to them having lender overlays.
  • FHA Lender Overlays are additional mortgage guidelines that is imposed by individual mortgage lenders and NOT FHA.
  • 75% of our borrowers are home buyers who were recently denied for a mortgage loan after they were pre-approved or are going through a stressful mortgage process with their current lender.

Bad Credit Scores Can Be Improved

Poor credit scores can be improved and if you have recently damaged your credit by being late on your monthly bills, your credit score will gradually improve over time.
  • It is like a bad hangover. 
  • Once you are late with a car payment, for example, your credit scores will probably drop 50 to 100 points. 
  • However, if you pay your car payment on time for the next year, you will probably regain most of the drop back to good credit status.

Makeup Of Your Credit Scores

  • 35% Payment History
  • 30% Outstanding active debts
  • 15% Length of credit history
  • 10% Types of credit accounts
  • 10% New credit applications

Monitoring Credit Report

You should monitor your credit report and credit scores like you monitor your bank account.

  • Bad credit will mean higher interest rates on your loans, higher insurance premiums on your insurance, and can cause you a job offer or promotion.
  • Most employers run credit background checks on new employees or current employees who are candidates for a promotion.

How To Obtain Florida Bad Credit Mortgage Loan?

The Gustan Cho Team now offers NON-QM Loans such as bank statement loans, no income verification loans, and one day out of foreclosure and/or bankruptcy mortgage loans. Over 75% of our borrowers are folks who got either a last minute mortgage loan denial or are going through an intense level of stress during their mortgage process with their current lender because they were not properly qualified. Gustan Cho and The Gustan Cho Team are experts in closing loans in 21 days or less and close 100% of their pre-approvals. There is no reason why a pre-approved borrower cannot just close their home loan but close it on time.

I specialize in helping mortgage loan borrowers who have problem credit or poor credit scores qualify for mortgage loans. If you want to purchase a home but have poor credit scores, contact Gustan at 262-878-1965 or text Gustan Cho on his cell for faster response at 262-716-8151. You can also email us at gcho@gustancho.com or visit The Gustan Cho Team at  www.gustancho.com .

2017 Mortgage Blog Post Update

This mortgage blog post article was updated on May 27, 2017 by Gustan Cho NMLS 873293 of The Gustan Cho Team

Gustan Cho NMLS ID 873293
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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