Bad Credit Home Loans
Bad credit home loans may sound ambigous. What we mean by Bad Credit Home Loans is when a mortgage loan borrower has had prior bad credit but has re-established their credit and have no late payments in the past 12 months. Recent multiple late payments would be an issue and there is no way a person can qualify for a home loan if they have had tons of multiple late payments in the past 12 months.
Florida mortgage rates and credit scores are two constants for a potential mortgage loan borrower.
The lower your credit score, the higher your mortgage rates. Most mortgage lenders have credit score cutoffs for certain mortgage rates. I specialize in bad credit home loans in Illinois and Florida and a large percentage of my business is helping mortgage loan borrowers with credit scores under 600 FICO.
What are the current Florida mortgage rates? What credit scores can I work with?
I recently qualified a mortgage loan client who had a credit score of 588 FICO. Mortgage rates for a mortgage loan borrower with a 588 FICO credit score on a FHA insured mortgage loan is around 4.625%. If my mortgage loan borrower had a credit score of over 620 FICO, then her mortgage rates would drastically drop to 3.25%. On this particular case, my mortgage loan client and I have decided to boost her credit scores up to over 620 FICO and then apply for a mortgage loan. There are various ways of improving a person’s credit score in a short period of time. I have covered credit score improvement strategies on previous blogs and will cover more on this topic on future blogs.
What are my options for bad credit home loans now?
For those mortgage loan borrowers who cannot afford the luxury of waiting several months to improve their credit, they will be charged higher mortgage rates due to their lower credit scores.
Conventional mortgage loans have higher mortgage rates compared to FHA insured mortgage loans. Conventional mortgage loans are extremely credit score sensitive. For example, most conventional mortgage loan programs have minimum credit score requirements of 620 FICO or higher. There is an adjustment cutoff at 640, 680, 720, and 760. By adjustment cutoffs, if a mortgage loan borrower surpasses each of these credit score limits, their mortgage rates will be lower. For those with credit scores of 760 or higher will get the best conventional mortgage rates.
Waiting Period after Bankruptcy and Foreclosure
With conventional mortgage loans, the waiting periods to qualify for a mortgage loan after a bankruptcy and a foreclosure are much longer than FHA insured mortgage loans. Typically, there is a waiting period of at least 4 years after a bankruptcy and much longer after a foreclosure to qualify for a conventional mortgage loan.
If you have any questions on how your credit scores affect mortgage rates, please contact me at www.gustancho.com .