Home Loan With Bad Credit Texas With No Lender Overlays

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This BLOG On Home Loan With Bad Credit Texas With No Lender Overlays Was UPDATED And PUBLISHED On February 9th, 2020

Which means a major loan with bad credit Texas without lender overlays

The State Of Texas is one of the largest states in the United States.

  • Texas is also one of the fastest-growing states and the housing market is booming
  • Many California residents migrate to Texas due to the still low housing prices compared to California
  • Average home values of Texas is 70% of California housing prices
  • A substantial percentage of clients of Gustan Cho Associates are Texas home buyers

In this article, we will cover and discuss qualifying for a mortgage in Texas with bad credit.

Qualifying For A Mortgage In Texas

Texas is a community property state.

  • There are nine community property states in the United States
  • Texas homebuyers who are married need to count the spouse’s debt when qualifying for a Texas home loan even though the spouse is not on the mortgage

Texas Home Buyers Qualifying For Home Loan With Bad Credit Texas

Texas homebuyers who are a first time home buyer seeking home loan with bad credit Texas came to the right website.

  • We will explain how first time home buyers or home buyers with prior credit issues can qualify for Home Loan With Bad Credit Texas With Gustan Cho Associates
  • Gustan Cho Associates is the national consumer direct division of Loan Cabin Inc. NMLS 1657322
  • The company grew every year and now has close to 1,000 licensed and support personnel and still growing
  • Gustan Cho Associates is one of the largest direct lenders in the state of Texas
  • Has a five star old fashioned business model

Both CEO Massimo Ressa and Gustan Cho are hands-on and still to this date originate loans.

No Layers Of Management

We do not have layers of Vice Presidents, Regional Managers, Area Manager:

  • Every single new employee at Gustan Cho Associates is personally reviewed and signed off by Gustan Cho and Massimo Ressa
  • There is no other mortgage company in this country that has the CEO and COO hands-on like this and this is why the company is a five star rated company
  • We are poised to be the number one mortgage banker in the United States
  • Gustan Cho Associates has been rated as the best place to work year after year
  • It is no wonder that the average employee at Gustan Cho Associates Mortgage Group has been with the company for 8,7 years
  • With their five-star business model, Gustan Cho Associates has expanded its business model to Texas
  • The Team at Gustan Cho Associates has a huge presence in the state of Texas
  • Countless of homebuyers, homeowners, real estate agents, and even loan officers do not realize that a company like Gustan Cho Associates exists

Over 75% of borrowers of Gustan Cho Associates are folks who either got a last-minute mortgage denial or are stressing over their mortgage process.

No Lender Overlays On Home Loan With Bad Credit Texas

Which means no loans from a lender for a home loan with a bad credit in Texas

We close 100% of all of our pre-approvals because all of our pre-approvals at Gustan Cho Associates Mortgage Group is a full credit loan approval signed off by one of our mortgage underwriters. Lender Overlays are additional mortgage guidelines imposed by individual lenders that are above and beyond those of federal guidelines on FHA, VA, USDA, and Conventional Loans. Gustan Cho Associates has no lender overlays on government and conventional loans.

This is why we can close mortgage loans where other lenders can’t.

  • Most first time home buyers think just because they have had prior bad credit that they do not qualify for a residential mortgage loan
  • I specialize in helping Texas first time home buyer seeking home loan with bad credit Texas
  • There are many borrowers who went to several lenders and were told that they did not qualify for home loan with bad credit Texas
  • One thing that these lenders did not tell these borrowers is that they may not qualify for home loan with bad credit Texas with their lending institution but can qualify for a home loan with bad credit Texas with another direct lender with no overlays
  • Not all lenders have the same mortgage qualification requirements
  • Banks, for example, want higher credit score borrowers with no outstanding collections and/or charge off accounts
  • Texas mortgage borrowers do not have to pay off outstanding collection accounts and charge off accounts to qualify for a mortgage loan
  • Borrowers can qualify for FHA Loans in Texas with less than perfect credit, bad credit, and outstanding collection accounts and charge off accounts

I will go into detail on the qualification requirements per FHA Guidelines.

Getting Pre-Approved For Home Loan With Bad Credit Texas

How bad can your credit be for a first time home buyer seeking home loan with bad credit?

  •  This is the most common question I get asked by a first time home buyer seeking home loan with bad credit Texas
  • A first time home buyer seeking home loan with bad credit Texas can have prior derogatory credit due to some extenuating circumstances such as unemployment, medical reasons, divorce, or loss of business
  • The first time home buyer seeking home loan with bad credit cannot have total disregard for credit
  • By having total disregard for credit means that he or she cannot be blatantly late if they had the means to pay their monthly credit obligations

For example, the mortgage loan underwriter will be reviewing a mortgage loan applicant’s credit history as well as their employment history.

How Mortgage Underwriters Review Credit Payment History

Let’s take a case scenario on how mortgage underwriters review borrower’s overall payment history. If the mortgage loan applicant has a ten-year credit history and their payment history shows the following:

  • On year 7 and year 8 borrowers had a bunch of late payments, derogatory credit, and collection accounts
  • On year 9 and 10 had re-established their credit by getting 3 secured credit cards
  • No late payments since getting those secured credit cards
  • The mortgage underwriter will cross-check that period of derogatory credit with the employment history

The mortgage loan underwriter will review the overall borrower’s credit history. The underwriter will investigate the borrowers period of bad credit:

  • How was the borrowers’ credit prior to the bad period of credit?
  • What was the reason for the borrower not being able to meet their monthly debt obligations?
    • Unemployment?
    • Divorce?
    • Medical Issues?
    • Change Of Jobs?
  • How long was the period of bad credit?
  • Was it due to unemployment?
  • Has the borrower re-established credit?
  • Has the borrower been timely in the past 12 months?

If the borrower has had a period of bad credit due to unemployment, this is perfectly understandable.

  • Underwriters will want to see that the borrower has since gained full-time employment and that their employment is likely to continue for the next three years
  • Re-Established Credit and no late payments after gaining new employment is a must
  • No Late Payments After Bankruptcy And/Or Foreclosure

Borrowers With Disregard To Credit

However, on a different case scenario, if the mortgage applicant had a ten-year credit history and has been employed consistently but has been consistently making late payments and has had continued collection accounts, charge offs, and other derogatory, then this individual will be deemed as financially irresponsible and most likely will not get a residential mortgage loan approval.

  • Prior payment history reflects the financial responsibility of the mortgage loan applicant and is a good indicator on their future payment prediction
  • This is how mortgage lenders and other creditors view credit history and payment history
  • Everyone can have a hiccup in their lives
  • Their credit scores can be majorly hurt
  • What mortgage underwriters look for in borrowers seeking home loan with bad credit Texas is that they have recouped and are now fully employed 

Underwriters also want to see that borrowers have re-established credit and have no late payments in the past 12 months.

UPDATE In Qualifying For VA And FHA Loan With Bad Credit Texas

How to Qualify for VA and FHA Loans with Bad Credit in Texas

VA and FHA Guidelines are fair and relaxed for borrowers that most folks can qualify for an FHA loan with bad credit.

Here are the basic updated FHA Guidelines:

  • Borrowers can qualify for FHA Loans with a 580 credit score.
  • Minimum down payment required for FHA home purchase loan is 3.5%
  • 2 year waiting period after Chapter 7 Bankruptcy discharged date to qualify for FHA and VA Loans
  • 3 year waiting period after the recorded date of foreclosure and/or deed in lieu of foreclosure to qualify for FHA Loan and 2 year waiting period for VA Loans
  • 3 year waiting period after short sale date to qualify for FHA Loan and 2 year waiting period for VA Loans
  • Texas home buyers can qualify for VA and FHA Loan with outstanding collection accounts and charge off accounts without having to pay them off
  • Home Buyers can get approved for a  VA and FHA Loans one year into a Chapter 13 Bankruptcy Repayment Plan
  • Texas Borrowers are eligible for VA and FHA Loan with no waiting period after a Chapter 13 Bankruptcy discharged date on a manual underwrite
  • FHA allows non-occupant co-borrowers to be added to borrowers and there are no limits on the number of co-borrowers
  • VA allows only spouse to be co-borrower on VA Loans
  • FHA will allow for 100% of the down payment to be gifted
  • HUD allows up to 6% in sellers concessions by home sellers to cover home buyers closing costs
  • VA permits 4% sellers concessions

Qualifying For Texas Mortgage With Direct Lenders With Zero Overlays

Gustan Cho Associates Mortgage Group is one of the largest direct lenders with no overlays in Texas. Home Buyers who need to qualify for a Texas FHA Loan, VA Mortgage, USDA Home Loans, or Conventional Loan, please contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at gcho@gustancho.com. We have experienced Texas licensed loan officers to help and are available 7 days a week, evenings, weekends, and holidays.

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