Can I Qualify For Home Loan After Credit Repair?

Mortgage loan applicants with real bad credit can qualify for a home loan after credit repair.  There are mortgage lending guidelines with regards to prior bad credit such as prior bankruptcy, foreclosure, deed in lieu of foreclosure, short sale, unpaid collection accounts, charge offs, tax liens, judgments, late payments, and other derogatory credit items.  There are also minimum credit score requirements to qualify for a home loan.  Minimum credit score requirements depends on the mortgage loan program.  For example, to qualify for a 3.5% down payment FHA home loan, minimum credit scores required are 580 FICO.  To qualify for either a 3% down payment or 5% down payment conventional loan, the minimum credit scores required is 620 FICO.  To qualify for a Jumbo Mortgage, minimum credit scores required is 700 FICO.  There are some Jumbo Mortgage Lenders who will accept Jumbo Mortgage Applicants with credit scores under 700 FICO.

Does Credit Repair Work?

Credit repair does work.  There are many credit repair consultants that can do wonders and can remove practically anything off someone’s credit report.  These credit consultants know the ins and outs of the laws governing the Fair Credit Reporting Act and know the loopholes in the credit reporting system and often times can even remove derogatory credit items that are correct.  Derogatory credit items such as unpaid collection accounts, charge offs, and late payments can be deleted off the credit report.  Public records such as judgments, tax liens, child support and alimony, bankruptcies, foreclosures, short sales, deed in lieu of foreclosures can also be removed one’s credit report as well.  However, there may be issues with getting a home loan after credit repair with derogatory items removed from public records which we will discuss later.

Which Credit Repair Company Do I Choose?

There are tens of thousands, if not hundreds of thousands credit repair companies in the United States.  Which credit repair company do you choose?  When you look online you see a bunch of fancy credit repair website all claiming to be experts with testimonials on how great they are.  Whatever a credit repair company does, you can do it yourself and you can repair your credit on your own.  However, many folks do not have the time to do research on credit repair nor the time to tackle this task since they work full time jobs.  Like many other industries, there are reputable credit repair companies and credit repair companies that are incompetent as well as scammers just trying to get a monthly fee from you every month with little or no work being done.  The best way of going about choosing the right credit repair company is not just going on the internet and finding the best sounding credit repair website but to ask for referals from friends, business colleagues, realtors, mortgage brokers, accountants, attorneys, or other professionals.  Many folks who were not happy with credit repair or any other services will not refer you to them.  Many folks who had luck with repairing their credit will gradly refer you to them.  I know of many credit repair consultants who does Magic and a great job at a reasonable cost who does not even have a website nor an office and work from home.  Yet you have credit repair companies with fancy websites who spend thousands of dollars in advertising and are incompetent and do not know what they are doing.

Is Credit Repair Recommended To Qualify For Home Loan After Credit Repair?

If your credit scores are below 580 FICO and you have tons of old derogatory items and unpaid collection accounts, then the answer is yes that qualifying for home loan after credit repair is recommended. Deletions of charge offs, unpaid collection accounts, and late payments will do wonders to your credit profile and credit scores.  However, public records such as bankruptcies, foreclosures, tax liens, child support payments, and judgments may help your credit scores and credit profile but your mortgage lender will find out about it and may address the derogatory credit items.  Even though your bankruptcy, foreclosure, deed in lieu of foreclosure, tax liens, and judgments may be deleted off your credit report, the mortgage lender will find out about public records that has been deleted because they will hire a third party vendor to do a public records search.  Bankruptcies and Foreclosures will definitely be discovered.  Tax liens and judgments may or may not be discovered.  When applying for a mortgage application, there will be a disclosure sheet where they ask you whether or not you have filed bankruptcy and foreclosure.  If you did in fact filed bankruptcy or had a foreclosure and you mark NO because it is deleted off your credit report, you need to think twice because by doing so you are committing mortgage fraud.

Credit Repair And Re-Establishing Credit

If you are going to apply for home loan after credit repair, just deleting off derogatory items off your credit report is not enough.  You also need to re-establish your credit by adding new credit to your credit report and make sure you pay them on time.  One 30 days late payment will drop your credit scores by at least 50 plus FICO points.  The fastest and easiest way of rebuilding your credit is by getting 3 to 5 secured credit cards with at least a $500 credit limit on each secured credit card.

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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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