Florida Bad Credit Mortgage Loans With No Lender Overlays

This Article Is About Florida Bad Credit Mortgage With No Lender Overlays

Florida was one of the states that were 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. 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. Today, Florida is back to being one of the hottest states. In this article, we will discuss and cover how Florida homebuyers can qualify for a mortgage with bad credit.

Florida Housing Market Today

Florida Housing Market Today

There is a shortage of homes than the demand of home buyers:

  • Folks who lost their homes back from 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, homebuyers 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. Many who have fell victims to 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 the 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 to credit scores in making a determination on whether to grant credit. 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 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:

  • 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 Team at Gustan Cho Associates are experts and 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 Gustan Cho Associates have a five-star national reputation in both service and closing loans in 21 days or less.

The business model at Gustan Cho Associates is no lender overlays on government and conventional loans. Gustan Cho Associates is known nationally for being one of the most aggressive Florida Bad Credit Mortgage Professionals.

Minimum Credit Score Requirements To Qualify For A Home Mortgage

Minimum Credit Score Requirements To Qualify For A Home Mortgage

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
  • There are no minimum credit score requirements with VA Loans
  • Conventional Loans require a 620 Credit Score
  • USDA Loans have a 580 FICO Requirement

Borrowers with credit scores under 580 and down to 500 FICO can qualify for an FHA loan with a 10% down payment.

How Lenders Determine Risk Level Of Borrowers

Here is how lenders tier and classify credit scores of borrowers:

  • A credit score of 760 to 850 is classified as having an excellent credit score
  • Credit scores between 700 to 759 is classified as a great credit score
  • A credit score of 660 to 699 is classified as a good credit score
  • Credit scores of 580 to 659 is classified as a fair credit score
  • A 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. Will treat anyone with a 740 credit score or higher the same as someone who has an 850 credit score.

Florida Bad Credit Mortgage For 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. Gustan Cho Associates 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 us at Gustan Cho Associates.

A large percentage of our borrowers have under 600 credit scores. HUD requires a 580 FICO for a 3.5% down payment FHA loans. But most lenders require a higher credit score due to them having overlays.

Lender Overlays are additional mortgage guidelines that are imposed by individual lenders and NOT FHA:

  • 75% of our borrowers are home buyers who were recently denied a mortgage loan after they were pre-approved:
  • Or are going through a stressful mortgage process with their current lender

Florida Bad Credit Mortgage: 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. It takes patience and time for the credit score to go back up. Reestablishing and rebuilding credit can definitely be done. But not overnight. It takes months to reestablish credit after a period of bad credit. 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 Consumer Credit Scores

Makeup Of Consumer Credit Scores

Below is the makeup of a consumer’s credit profile and how credit bureaus derive credit scores:

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

Gustan Cho Associates 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. This is because they were not properly qualified.

Gustan Cho Associates are experts in closing loans in 21 days or less. We 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.

Gustan Cho Associates are experts in helping 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 us at 262-716-8151 or text us for a faster response. or email us at [email protected] or visit us at Gustan Cho Associates Mortgage Group at  www.gustancho.com.

Mortgage Blog Post Update On Florida Bad Credit Mortgage

This mortgage blog post article was updated on August 30th, 2021.

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