Qualifying For Home Loan With Judgment

Home Loan With Judgment

Gustan Cho Associates

A judgment is issued by a judge in the creditor’s favor for an set amount against you.  Mortgage loan borrowers can qualify for home loan with judgment. The creditor is known as the judgment creditor.  A judgment is probably the worst thing you can have against your credit.  Collections and collection accounts can all lead to judgment accounts. It is up to the creditor to see how far they want to take the collection account. The only way you can get rid of a judgment without paying is by filing bankruptcy. The good news is that a mortgage loan borrower can qualify for home loan with judgment as long as you have a written payment agreement with the judgment creditor and have been paying the judgment creditor for at least three months. You need to pay the judgment creditor for three months and cannot pay the whole three months upfront once you have the written payment agreement set up with the judgment creditor.

Vacating A Judgment

There are ways of vacating a judgment by filing an appeal that you have not received proper service. Doing so does not make the judgment go away. You can also negotiate with the judgment creditor if they are willing to settle for a smaller amount of the judgment and consider the judgment satisfied. Appealing the judgment to have the judgment vacated is rather difficult and time consuming. Mortgage borrowers who are looking for a home loan with judgment needs to realize that trying to vacate a judgment can take some time.

How Long Does Judgment Stay On Credit Report?

A judgment will stay on your credit report for a period of 7 years from the judgment issue date. Most judgments are good for a period for ten years, however, the judgment creditor can renew it for another ten years.  You are considered judgment proof if you have very limited income and no assets.  Judgment proof means that the judgment creditor is not able to collect any money or assets from you. For those who are applying for home loan with judgment can do so and pay the judgment off prior to closing or at closing.

Can I Get Mortgage If I Have An Unstatisfied Judgment Or Do I Need To File Bankruptcy?

Most mortgage lenders will not lend on mortgage loan borrowers who have outstanding judgments.  My advise is to consult with a mortgage broker who specializes in bad credit mortgage loans.  I have correspondent mortgage wholesale lenders that are willing to approve mortgage loans for mortgage loan borrowers with a prior unsatisfied judgment as long as they have a written payment plan and have been paying on the judgment for two continuous months.  Cancelled checks, bank statements, and the judgment repayment plan agreement need to be provided.

When Do I Have To Pay Off Judgment Prior To Mortgage Closing

If your mortgage lender requires you to pay off the judgment as part of the conditional mortgage approval, you can pay off the judgment prior to closing or in some cases, at closing.  Proof of funds will be required and a judgment release will be required as well along with cancelled checks.

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.

2 Comments

  1. I AM IN THE PROCESS TO CLOSING AND THEY ASK ME FOR THE SATISFIED LETTER FROM THE COURT I JUST PAID THE JUDGMENTS ON FULL THEY TAKE TIME TO GO TO COURT, DO YOU THINK THEY WILL DENIED THE LOAN BECAUSE I DONT HAVE THE RELEASE FROM THE COURT YET?

    • Gustan Cho says:

      No. As long as you get the release from the judgment creditor, you can have the title company take care of it at your home closing.