Can I Qualify For Home Loan With Low Credit Scores?

Bad credit mortgage loans

Gustan Cho Associates

Folks thinking about purchasing a home should start getting prepared right away, even though you are thinking purchasing a home in the future.  One of the most important factors in getting a mortgage approval are credit scores.  Credit scores is the determinent factor that determines what type of mortgage loan you qualify for.  For example, to qualify for a conventional loan, you need a minimum credit score of 620 FICO.  To qualify for a Jumbo Mortgage , you need a credit score of 700 FICO.

Importance Of Credit And Credit Scores

Having a good credit score is important not just to see whether or not your qualify for a mortgage loan but will also determine your mortgage rates.  The higher your credit score, the lower your interest rates will be.  Mortgage lenders view home buyers and homeowners with lower credit scores as higher risk borrowers so they will quote a higher mortgage rate for borrowers seeking a home loan with low credit, especially conventional loan mortgage applicants.  There can be a 1.0% swing in interest rates from a 620 FICO credit score conventional loan borrower and a 740 FICO credit score conventional mortgage loan borrower.  Same with jumbo mortgage loan borrowers.  A jumbo mortgage loan applicant with credit score of 700 FICO may be quoted a 5.5% rate where a jumbo mortgage loan borrower with a 740 plus FICO  credit score may be quoted with a 4.5% interest rate.

Factors Affecting Credit Scores And How To Improve It

When you apply for a mortgage loan, your mortgage loan officer will take a formal mortgage application or you can apply online.  Your mortgage loan officer will then pull your credit and review your credit history and credit scores.  The credit history is important but does not affect your mortgage rates but may have an impact on whether your qualify or not.  Things on your credit history that will be reviewed will be prior bankruptcy, foreclosure, deed in lieu of foreclosure, short sale. If you have a prior bankruptcy, foreclosure, deed in lieu of foreclosure, short sale, you could still qualify for a mortgage loan as long as you have met the mandatory waiting period after bankruptcy and foreclosure and whether or not you had a prior bankruptcy, foreclosure, deed in lieu of foreclosure, or short sale will not affect your interest rate on your mortgage loan.  Credit scores will affect your mortgage rates on your mortgage loan.  With a low credit score, you may qualify for a mortgage loan but odds are that you will get a higher mortgage rates and may not qualify for the type of mortgage loan program you may prefer.  FHA loans are the best mortgage loan program for those seeking a home loan with low credit or home loan with bad credit.

Having a low credit score will not disqualify you for a mortgage loan.  I specialize in helping borrowers seeking a home loan with low credit or home loan with bad credit especially borrowers with credit scores of under 600 FICO.  If your credit scores are under 580 FICO, call me or contact me at gcho@gustancho.com and I will help you boost your credit scores up so you are able to qualify.

 How To Boost Your Credit Scores

There are some quick fixes to boost your credit scores.  Never pay off an old collection account or charge off even with unpaid balances on them because what that does is re-activate the collection account from being dormant to being active again.  It is like having a brand new collection account being reported on your credit report.  If you need to pay off an old collection account, you need to do a pay for delete on a collection account which is a negotiation tool that you will pay the old collection account in lieu of the collection agency wiping out your collection account totally off your credit report.  You can qualify for a mortgage loan with unpaid collection accounts per FHA mortgage lending guidelines.

Another thing to note is that no credit is the same as bad credit.  If you have never been late on any bills and have low credit scores, it may be because you do not have any active credit tradelines.  A quick fix may be by getting 1 to 3 secured credit cards .  Each secured credit card can easily boost your credit scores over 20 FICO points.

If you have credit cards and they are maxed out, this can be hurting your credit scores.  By paying down your credit cards to 15% of your available credit limit, it should greatly improve your credit scores.

Choose A Mortgage Lender Who Cares

Over half of my mortgage loan applicants are home buyers who were told they did not qualify for a mortgage loan from a bank, credit union, or other mortgage company and are looking for home loan with low credit scores.  Many of these borrowers may not have qualified for a mortgage loan due to the lender’s overlays or quite not meet the minimum mortgage qualification requirements.  However, everyone with a job with documented income will qualify for a home loan with low credit scores.  It is not if they qualify but when they qualify for a mortgage loan.  My staff and I love working with folks whose dream is to be first time home buyers or homeowners and will help you realize your dream and help you work on your credit and coach you on getting you qualified.  If your credit scores are very low or have other issues in qualifying for a mortgage, we will work with you no matter how long it takes to get your qualified, approved, and closed on your home loan.

When Other Lenders Say No, Contact Us

If you are a home buyer who has gone to multiple mortgage lenders and they told you they could not approve you for a home loan with low credit scores, I can help you.  I am a mortgage banker and correspondent lender with access to also broker mortgage loans and specialize in helping borrowers who seek home loan with low credit scores.  Here are some of my testimonials, click TESTIMONIALS from home buyers who I have helped and who turned out to be my lifelong friends.  To get started on the mortgage approval process, you can click APPLY NOW FOR PRE-APPROVAL and I will get alerted via email and will start working on getting you pre-approved.  You may also call me at 262-716-8151 or visit my website at www.gustancho.com

Gustan Cho NMLS 873293

www.gustancho.com

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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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