Home Loan With Bad Credit Ohio And Low Credit Scores

This BLOG On Qualifying For Home Loan With Bad Credit Ohio And Low Credit Scores Was UPDATED On November 25th, 2017

Written By Gustan Cho NMLS 873293

The Gustan Cho Team at USA Mortgage, a division of DAS Acquisition Company is a full service direct lender with no overlays on government and conventional loans with a big presence is the state of Ohio.

  • Over 75% of our borrowers come to us because they have gotten a last minute loan denial or are stressing during their current mortgage process with their current Ohio Mortgage Lender
  • Our Team is different than other lenders because we help every Ohio mortgage borrower who does not currently qualify help them get credit qualified
  • Most banks and lenders will tell Ohio home buyers who do not presently qualify to come back a year or two later once their credit improves
  • However, The Gustan Cho Team helps Ohio home buyers exactly what they need to do
  • Most of the time, it just may take a month or two. Thank you for visiting our website and USA Mortgage

Qualifying For Home Loan With Bad Credit Ohio

Many hard working responsible folks have gone through periods of financial hardship where they could not pay their bills due to the Great Recession of 2008. This affected their credit scores. Some had to file for bankruptcy while others lost their homes through foreclosures.

  • Many folks had to file bankruptcy and also had to go through a foreclosure, deed in lieu of foreclosure, short sale
  • Never since the Great Depression did we have historical unemployment, bankruptcies, and foreclosures due to the Great Recession and real estate meltdown of 2008
  • Whole industries got wiped out
  • Most neighborhood banks got bought out by giant banks
  • All the mortgage companies who were sub-prime lenders went out of business
  • Mortgage brokerage shops almost became extinct
  • Half the mortgage loan originators left the industry due to the rigorous new regulations
  • SAFE ACT was created and  implemented
  • The SAFE ACT required that all loan officers to take pre-education courses, pass a uniform national exams and state exams, undergo federal and state criminal background checks, go through credit checks and provide detailed letters of explanations for derogatory credit
  • New construction and home sales came to an abrupt halt after the Great Recession of 2008
  • New mortgage rules and regulations were implemented
  • Both HUD, Fannie Mae, Freddie Mac, VA, USDA, and portfolio mortgage lenders all eliminated no doc and stated income mortgage loans
  • Millions of home prices plummeted and many homeowners were stuck in homes where their home values were lower than the amount of their mortgage balances
  • Many hard working folks, especially retirees saw their hard earned equity of their home diminish literally overnight
  • Bankruptcy, foreclosure, deed in lieu of foreclosure, and short sales were common household terms
  • It was a major financial crisis and the biggest real estate meltdown in history

Home Loan With Bad Credit Ohio

HUD, FANNIE MAE, FREDDIE MAC, VA, USDA, and portfolio mortgage lenders realize the financial and mortgage meltdown as well as double digit unemployment statistics. Ohio was one of the biggest states affect by the real estate crash and mortgage meltdown. Historical bankruptcies and foreclosure rates left many hard working with bad credit.

  • The government made many changes
  • New mortgage lending guidelines were created and launched to spike the housing market and give folks who fell victim to the 2008 financial, credit, and real estate collapse new opportunities to become Ohio homeowners again
  • New guidelines were created for folks who filed bankruptcies in the state of Ohio
  • A 2 year mandatory waiting period after a Chapter 7 bankruptcy discharge was required for Ohio FHA Mortgage Borrowers to qualify for FHA Loans
  • Re-established credit guideline was implemented so people who were forced into bankruptcy and got back on their feet had a second chance to purchase a new home again
  • Folks who had a foreclosure, deed in lieu of foreclosure, or short sale, the new mortgage lending guideline was that they had to wait a 3 year waiting period in order to qualify for Ohio FHA Loans
  • They also implemented a new rule that home buyers needed to not be late after a bankruptcy, foreclosure, deed in lieu of foreclosure, or short sale and had to have re-established credit after their economic event to qualify for a OHIO Home Loan
  • The general public understood and accepted that bankruptcies, foreclosures, deed in lieu of foreclosures, and short sales happens to the best of us. 
  • Doctors, lawyers, pilots, mortgage professionals, professional athletes, prosecutors, judges, professors, corporate executives, small business owners, white collar professionals, contractors, blue collar workers, politicians, and professionals in dozens of other fields have contacted me with credit problems and had prior bankruptcies, foreclosures, deed in lieu of foreclosures, short sales, judgments, charge offs, open collections, tax liens, and other forms of prior bad credit
  • As long as they have income and can document their source of income, the question is not if they can get a mortgage but WHEN they can get qualified for a mortgage in Ohio
  • On the flip side, mortgage borrowers can have the best credit in the world but if theyare self employed or get paid in cash with no income documentation to show for, then they will not qualify for a government and/or conventional loan i Ohio
  • Ohio mortgage borrowers need to prove documented income either by two years tax returns for self employed and 1099 wage earners or by W2’s for hourly and salaried employees
  • Days of stated income and no doc mortgage loans have been gone for many years but now its back

Ohio Non-QM Loans And Bank Statement Loans For Self Employed Borrowers

The Gustan Cho Team at USA Mortgage now offers Ohio Home Buyers who are self employed can qualify for bank statement mortgage loans for self employed borrowers. NON-QM Loans and Bank Statement Loans:

  • Non-QM Loans have no waiting period after foreclosure, deed in lieu of foreclosure, short sale
  • Bank Statement Loans are for Ohio Self Employed Borrowers who have a lot of write offs on their tax returns
  • 24 months of either business and/or personal bank statements are averaged to calculate monthly income
  • No tax returns are required
  • If Ohio self employed borrower uses business bank statements, then only 50% of the deposits can be used
  • If home buyer uses personal bank statements, then 100% of the deposits can be used
  • Down payment requirement is based on borrower’s credit scores
  • 10% down payment if borrower has 680 credit scores
  • 15% down payment if borrower has 660 credit scores
  • 20% down payment for 640 credit score borrowers

So If I Have Income And Bad Credit, I Can Qualify For A Mortgage?

The answer to the above question is YES and NO.

  • Consumers who had a period of bad credit due to the economic and real estate collapse of 2008 and say, for example, if they had a period of collections, charge offs, bankruptcy, foreclosure, deed in lieu of foreclosure, short sale, or poor payment history, then the answer is yes
  • If bad credit was the cause of business going under or due to unemployment or medical reasons, then borrowers can qualify for a home loan with bad credit Ohio
  • However, borrowers who had a ten year credit history and had the whole ten years worth of late payment history and bad credit, then they will have a problem in qualifying for any type of mortgage loans
  • Mortgage loan underwriters will review the overall credit history of a mortgage loan applicant and will not just go off their credit scores but will review the borrower’s overall credit payment history
  • Bad credit is considered when someone has credit scores below 640 FICO
  • A person can qualify for a 3.5% down payment FHA Loans with 580 credit scores
  • However, the mortgage loan underwriter will not just evaluate a person’s credit score
  • The mortgage loan underwriter will review the mortgage applicant’s overall credit profile
  • Underwriter will also thorough review borrowers credit history 
  • Mortgage Underwriters will also review period of bad credit
  • A short term span of bad credit is acceptable as long as the mortgage loan applicant has re-established their credit and have proven themselves that they have been timely on all of their monthly credit obligations for the past 12 months

What If I Just Filed Bankruptcy Or Had Recent Foreclosure?

Consumers who just had a bankruptcy discharged, need to start working in re-establishing your credit.  Many folks ask me how they can re-establish their credit when their credit scores have plummeted due to their bankruptcy and/or foreclosure and qualify for Home Loan With Bad Credit Ohio.

  • It is extremely difficult to get unsecured credit cards or other forms of unsecured credit after a bankruptcy discharge
  • However, those with a recent bankruptcy discharge can start re-establishing their credit by getting several secured credit cards
  • 3 to 5 secured credit cards with $500 credit limits will do a world of wonders
  • Many folks who have a bankruptcy and get their secured credit cards right away can easily get their credit scores upwards of the high 600’s or lower 700’s in as little time as 12 months
  • There is a two year waiting period after a bankruptcy discharge to qualify for a residential FHA mortgage loan

Recorded Date Of Foreclosure Or Sheriff’s Sale Is Key Date

Borrowers can qualify for Home Loan With Bad Credit Ohio after foreclosure. Those who had a recent foreclosure and/or deed in lieu of foreclosure, make sure that the title is transferred out of their name and into the mortgage lender’s name to start the waiting period requirements in qualifying for  Home Loan With Bad Credit Ohio.

  • There is a mandatory 3 year waiting period after the date of the sheriff’s sale and/or the date your name was transferred out and into the name of the mortgage lender’s name and recorded in public records to qualify for FHA Loans
  • Homeowners who had a foreclosure and/or deed in lieu of foreclosure or short sale need to start re-establishing credit by making sure that they pay monthly credit payments on time
  • Mortgage Borrowers do not have any credit or very little credit, then need to start re-establishing new credit by getting several secured credit cards

Recent Late Payments

Mortgage Loan Borrowers who have recent late payments showing up on credit report can face issues:

  • Most mortgage lenders do not want to see any late payment history in the past 12 months
  • One late payment with a good letter of explanation may be doable
  • However, borrowers with multiple late payments in the past 12 months may need to wait and show at least six months of on time payment history
  • Borrowers cannot have child support payments and/or student loans in collections or arrears
  • Also, judgments needs to either be paid off or need to have a written payment agreement with the judgment creditor and provide 3 months cancelled checks

Qualifying For Home Loan With Bad Credit Ohio With Lender With No Mortgage Overlays

The Gustan Cho Team at USA Mortgage are five star national lenders with no mortgage overlays on government and conventional loans. We originate and fund countless of Home Loan With Bad Credit Ohio and lower credit scores and higher debt to income ratios. Ohio home buyers who need a direct lender with no lender overlays, please contact The Gustan Cho Team at USA Mortgage at 262-716-8151 or email us at gcho@usa-mortgage.com. We are a team of Ohio Licensed Mortgage Loan Originators available 7 days a week, evenings, weekends, and holidays.

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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