Home Loans in Wyoming With Poor Credit and Low FICO

Gustan Cho Associates are mortgage brokers licensed in 48 states

In this blog, we will discuss and cover how homebuyers can qualify for home loans in Wyoming with poor credit and low FICO scores.  Qualifying for home loans in Wyoming with poor credit and low credit scores is more than possible. The recent coronavirus outbreak in February 2020 has taken a toll on many Americans. Hard-working Americans got blindsided by the coronavirus outbreak. Workers at all levels had their work disrupted.

What Is The Lowest Credit Score Required For Home Loans in Wyoming?

Many faced temporary layoffs, while others were permanently laid off until further notice. To top it off, states ordered statewide shutdowns for many industries. The coronavirus scare is now over and most Americans are back to work and have re-established themselves. However, the damage that was caused has caused many to have poor credit. Bad and poor credit often leads to low credit scores which impact their ability to qualify for a mortgage. In this blog, we will cover and discuss qualifying and getting pre-approved for a mortgage in Wyoming with poor credit. The best mortgage lenders in Wyoming for poor credit are mortgage brokers with a network of wholesale mortgage lenders for bad and alternative credit.

How Do Lenders Look at You With Poor Credit?

Poor and bad credit can cover a wide variety of things in the mortgage world. Mortgage lenders fully understand periods of poor credit happen to the best of us no matter what nationality, social and economic background, education level, or gender. Many causes of poor credit are medical issues, death in the family, job loss, business loss and/or slowdown, divorce, and/or other things beyond one’s control like the coronavirus outbreak scare.

What Type of Mortgage Can I Qualify With Bad Credit?

The best mortgage lenders in Wyoming for poor credit are more than willing to qualify borrowers with poor credit but have reestablished themselves. The key is to reestablish themselves. You can have prior bad credit, unpaid collections, charged-off accounts, repossessions, bankruptcy, foreclosure, short sale, and other derogatory credit. However, lenders want to see that you have reestablished yourself and have been timely on all of your payments in the past 12 months.

What Credit Scores Do I Need To Buy A House In Wyoming?

The minimum credit scores required to buy a house in Wyoming depend on the type of home loan program. FHA and VA allow for home loans in Wyoming with credit scores down to 500 FICO credit scores. Conventional loans require a 620 FICO credit score. Non-QM loans allow for borrowers with credit scores down to 550 FICO. Traditional jumbo mortgages require a 660 FICO credit score. Non-QM Jumbo Loans require a 550 credit score. It is more important to have lower credit scores but on-time payments in the past 12 to 24 months. Lenders understand people can have had periods of bad credit. However, mortgage lenders want you to re-establish yourself.

How Far Do Mortgage Lenders Look Back at Credit?

Mortgage lenders normally look for timely payments in the last 12 to 24 months when looking back at credit. However, mortgage lenders will look at the borrower’s overall payment history in the last seven years. Mortgage underwriters look at the borrower’s credit payment history for the borrower’s payment patterns and periods of late payments. With periods of late payments, underwriters want to know what was the cause why the borrower was late on their debt payments. Was it due to unemployment? Was it due to illness? Or was it due to some other extenuating circumstances?

Can I Qualify To Buy a House in Wyoming With a 500 FICO?

The minimum credit score that is needed to buy a house in Wyoming is 500 FICO with FHA, VA, and Non-QM loans.  You can qualify and get pre-approved for home loans in Wyoming with low credit scores and poor credit. HUD, the parent of FHA, allows borrowers with credit scores down to 500 FICO to be eligible for FHA loans. VA does not have a minimum credit score requirement. Non-QM loans allow for borrowers with credit scores down to 550 FICO.

Can I Get Home Loan With Late Payments in Wyoming?

Fannie Mae and Freddie Mac require at least a 620 credit score on conventional loans. You can qualify for home loans in Wyoming with low credit scores and prior bad credit. However, you need to have timely payments in the past 12 months for the best chances of getting an approve/eligible per automated underwriting system (AUS). FHA and VA loans allow for manual underwriting on FHA and VA loans. To be eligible for manual underwriting, you need to have timely payments in the past 24 months.

Can I Buy a House in Wyoming if I Have Unpaid Collections?

Can I Buy a House in Wyoming if I Have Unpaid Collections?

All government and conforming owner-occupant primary home loans in Wyoming do not require collections and charged-off accounts to be paid no matter how much the outstanding balance. However, FHA loans are the most lenient mortgage loan program in Wyoming. We will detail each individual home loans in Wyoming later in this article.

Do All Mortgage Lenders Have The Same Credit Requirements?

Many homebuyers get often confused when shopping for home loans in Wyoming. One lender tells them that they need to pay outstanding collections off while another lender may tell them that the maximum outstanding collections they can have are no greater than $5,000. Yet other lenders may tell them that borrowers do not qualify for any home loans in Wyoming until the collections have been paid and been seasoned for two years. So what is the correct answer?

The Best Bad Credit Mortgage Lenders in Wyoming

One of the most frequently asked questions at Gustan Cho Associates is do all lenders have the same requirements on home loans in Wyoming? The answer is an absolute NO. We know it can be confusing and does not make sense. Many clients ask the following questions. Why is it so many different mortgage lenders in Wyoming that have different mortgage guidelines when it comes to home loans in Wyoming? Aren’t FHA and VA loans government loans?  Who is right and who is wrong?

Shopping For Best Mortgage Rates With Bad Credit

You can shop for the best mortgage rates even though you have low credit scores and bad credit. Not all bad credit mortgage lenders have the same mortgage rates. Some lenders for bad credit in Wyoming have higher rates than others. Other will charge discount points on top of having high rates. Gustan Cho Associates are experts in helping borrowers with bad credit in Wyoming with very competitive mortgage rates. Aren’t all lenders of government and conforming loans the same?  Don’t government and conforming loans have national uniform lending guidelines? The answer to the above is not all lenders have the same mortgage requirements. Most Lenders have mortgage overlays on government and conventional loans. Gustan Cho  Associates are mortgage brokers licensed in 48 states with wholesale mortgage lenders with no lender overlays on FHA, VA, USDA, and conventional loans.

FHA Loan Requirements in Wyoming

FHA loans are the most popular mortgage loan programs for first-time homebuyers, homebuyers with high debt-to-income ratios, and borrowers with lower credit scores, poor credit, and bad credit. To qualify for an FHA loan with a 3.5% down payment, a homebuyer needs a 580 credit score. If a homebuyer has credit scores under 580 FICO and down to 500 credit scores, homebuyers are still eligible for FHA loans but with a 10% down payment. Unpaid collections and charged-off accounts do not have to be paid. Not all FHA mortgage lenders are the same. Most lenders have overlays which are lending requirements that are higher than the minimum agency guidelines. Lender Overlays are mortgage guidelines that are above and beyond those of FHA Guidelines imposed by each individual lender.

Why Are Mortgage Lenders in Wyoming Not All The Same

Mortgage lenders in Wyoming have different mortgage requirements on the same type of loan program. We will mainly talk about FHA loans in this blog since FHA loans are the best and most popular mortgage loans for poor credit. Just because one lender says no does not mean that borrowers cannot qualify with another lender. Under FHA Loan Collection Accounts Guidelines, outstanding collection accounts do not have to be paid for borrowers to qualify for FHA loans. However, many lenders do require collection accounts to be paid prior to closing or at closing as part of their own mortgage overlays. For lenders with no overlays on collection accounts, borrowers do not have to pay off old collection accounts with outstanding balances. FHA recently changed rules in collection accounts.

Home Loans in Wyoming With Collections

Homebuyers can qualify for home loans in Wyoming after Bankruptcy. Here is the mortgage after bankruptcy guidelines in Wyoming:

There is a mandatory waiting period to qualify for a mortgage after the Chapter 7 Bankruptcy discharged date in Wyoming. The waiting period requirements depend on the type of mortgage loan program. The following are the waiting period requirements in qualifying for a mortgage after the Chapter 7 Bankruptcy discharged date.

FHA Loans During Chapter 13 Bankruptcy in Wyoming

Homebuyers can qualify for an FHA loan during the Chapter 13 repayment plan one year after filing the Chapter 13. You need to have made 12 timely payments on your bankruptcy. Trustee approval is required. Chapter 13 Bankruptcy does not have to be discharged. All Chapter 13 Bankruptcy FHA loans are manual underwriting. Manual underwriting guidelines apply. Gustan Cho Associates are experts in helping borrowers during Chapter 13 Bankruptcy repayment plan.

FHA Loans After Chapter 13 Bankruptcy Discharge in Wyoming

Homebuyers in Wyoming can qualify for an FHA loan after the Chapter 13 Bankruptcy discharge date with no waiting period requirements. If the Chapter 13 Bankruptcy discharge has not been discharged for at least two years, it needs to be a manual underwrite. The only difference between a manual underwrite and automated underwriting system approval is with manual underwriting the debt-to-income ratio is lower.  Manual underwriting guidelines require a 31% front-end and 43% back-end debt-to-income ratio with no compensating factors, 37% front–end and 47% back-end debt-to-income ratio with one compensating factors, and 40% front-end and 50% back-end debt-to-income ratio with two compensating factors.

Can I Qualify For Home Loans In Wyoming With Bad Credit?

Unpaid collections and charged-off accounts do not have to be paid on all government-backed and conforming home loans in Wyoming. This includes all FHA loans, VA loans, USDA loans, and Conventional loans. However, the easiest and most lenient mortgage loan programs to qualify for home loans in Wyoming with collections are FHA and VA loans. In the following paragraphs, we will detail qualifying for FHA and VA loans with collections, charged-off accounts, and bad credit.

Can I Qualify For FHA Loans With Collection Accounts in Wyoming?

Homebuyers can qualify for home loans in Wyoming with unpaid collections and/or charged-off accounts. Borrowers with unpaid non-medical collection accounts with greater than a $2,000 unpaid balance, will have a 5% hypothetical debt of the balance used in debt-to-income ratio calculations. For example, for borrowers with unpaid non-medical collection accounts with an outstanding non-medical collection balance of $10,000, the underwriter will use 5% of the $10,000 outstanding balance owed, $500.00, and use that figure as a hypothetical month debt in calculating debt to income ratios. This rule only applies if the total aggregate amount of the collection account balance exceeds $2,000 in outstanding non-medical collections. Those who have unpaid non-medical collection accounts under $2,000, they are exempt from this 5% DTI calculation rule.

FHA Loans With Unpaid Medical Collection Accounts

FHA Loan Collection Accounts on non-medical are exempt. For collection accounts that are medical collections, the above rules do not apply. Borrowers can have outstanding collection accounts on medical collections. There are no limits as to the amount of balance the borrower has and the 5% of the outstanding balance will not be deducted. If borrowers consult with lenders with overlays, that particular lender may have their own overlays on how they treat collections, whether medical or non-medical.

How To Apply For VA Home Loans in Wyoming

VA loans are the best mortgage loan program in the nation. Not every American are eligible to qualify for VA home loans in Wyoming. Only borrowers who are eligible with a certificate of eligibility can qualify for a VA loan. Lenders offer 100% financing with no mortgage insurance at competitive rates to eligible active duty and/or retired members of the United States Armed Services. VA loans has lenient mortgage guidelines. There is no minimum credit score requirements or maximum debt to income ratio caps. There is no maximum debt-to-income ratio on VA loans.

Credit Disputes During Mortgage Process

Credit disputes for any non-medical collection accounts with outstanding credit balances exceeding $1,000 or more are not allowed. All credit disputes need to be retracted before the mortgage process can proceed. For those going through credit repair and disputing derogatory credit items with credit balances, credit disputes on non-medical collections, charged-off accounts, late payments, and other derogatory tradelines needs to be removed. Mortgage Guidelines prohibit credit dispute on items over $1,000 that is non-medical.

How Can The Mortgage Process Progress with Credit Disputes?

How Can The Mortgage Process Progress with Credit Disputes?

Credit Disputes need to be retracted before the loan process can proceed forward. The problem with retracting a credit dispute is the credit score often drops once it is retracted. I had a case where one mortgage applicant retracts a credit dispute with a credit balance and once the credit dispute was retracted, it dropped her scores by almost 100 points. Non-Medical credit disputes with zero balances are exempt. Borrowers can dispute derogatory credit items with zero balances and will not affect the mortgage process. Medical derogatory credit disputes with credit balances are also exempt from this rule.

Best Wyoming Mortgage Lenders For Bad Credit With Collections

Borrowers who need to qualify for a mortgage with a national direct lender with no mortgage lender overlays on government and conventional loans can contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at [email protected] We have zero overlays on FHA, VA, USDA, and Conventional Loans. The team at Gustan Cho Associates is available 7 days a week, on evenings, weekends, and holidays.