Home Loans With Bad Credit in Illinois Mortgage Options

Gustan Cho Associates are mortgage brokers licensed in 48 states

In this article, we will discuss and cover qualifying and getting approved for home loans with bad credit in Illinois. Many folks who became victims of the Great Recession of 2008 still do not realize those home buyers can qualify for home loans with bad credit in Illinois with collection accounts without needing to pay it off. Owner-occupant primary home loans in Illinois do not require outstanding collections and charged-off accounts to be paid to qualify for a mortgage. FHA, VA, USDA, Fannie Mae, and Freddie Mac do not require prior bad debts to be settled. However, each individual mortgage lender can have their own higher lending guidelines above and beyond the minimum agency mortgage guidelines called lender overlays. Gustan Cho Associates are mortgage brokers licensed in 48 states including Washington DC, and Puerto Rico with wholesale mortgage lenders with no lender overlays on government and conventional loans.

Can I Qualify For Home Loans With Bad Credit in Illinois With Poor Credit?

Can I Qualify For Home Loans With Bad Credit in Illinois With Poor Credit?

You do not have to pay outstanding debts such as collections, charged-off accounts, repossessions, HELOCs, and other outstanding debts to qualify for government and conventional loans. Mortgage lenders are more concerned about how you have re-established yourself after periods of bad credit. You can have prior bankruptcy, foreclosure, deed in lieu of foreclosure, and a short sale and still qualify for a home mortgage. There are waiting period requirements after bankruptcy and/or housing events. However, Gustan Cho Associates has non-QM mortgages one day out of bankruptcy and foreclosure with a 30% down payment. We will explore the many mortgage options for home loans with bad credit in Illinois. We will go over the various programs for home loans with bad credit in Illinois.

What Credit Score Is Needed To Buy a House in Illinois?

The lowest credit required to qualify for FHA, VA, and non-QM home loans with bad credit in Illinois is 500 FICO. The easiest home loans with bad credit in Illinois are FHA loans. Although you can qualify for conventional loans with bad credit, FHA and VA loans are two mortgage loan programs that are most lenient for bad credit and low credit scores. FHA loans are easier with bad credit and late payments than VA loans.

What Type of Mortgages Are For Bad Credit in Illinois?

Other home loans with bad credit in Illinois mortgage options include non-QM loans. However, non-QM mortgages require at least a 20% down payment on a home purchase. The real estate and credit collapse has created new mortgage guidelines that affected seasoned veteran mortgage loan originators. All mortgage loan originators now had to get licensed at both the federal and state levels and pass both criminal background checks and credit checks. Half of the nation’s mortgage loan originators ended up leaving the field and thousands of mortgage companies closed their doors. Bankruptcies and foreclosures soared to historical highs as well as unemployment rates.

Can I Qualify For Home Loans With Bad Credit In Illinois With 500 Credit Scores?

The whole mortgage industry has undergone a complete overhaul and new federal guidelines were implemented. Banks and credit unions were scared to lend and the mortgage industry today is tougher than ever. Many honest hard-working folks never thought they can ever be homeowners again because they had a prior bankruptcy and/or foreclosure or less than perfect credit.

The Best Illinois Bad Credit Mortgage Lenders For Bad Credit

The good news is that there are mortgage lenders who specialize in home buyers getting home loans with bad credit in Illinois. You can qualify for home loans with bad credit in Illinois with credit scores down to 500 FICO.  FHA, VA, and Non-QM loans have bad credit mortgage loan programs for credit scores down to 500 FICO. In this article, we will discuss and cover home loans with bad credit in Illinois.

How Do You Qualify For Home Loans With Bad Credit Illinois in 2022?

How Do You Qualify For Home Loans With Bad Credit Illinois in 2022?

Like millions of Americans, the real estate and financial collapse of 2008 has affected me personally. I was a real estate investor who owned, managed, and operated 7 apartment complexes that consisted of just under 3,000 residential units. Here is my story. Foreclosures, collections, judgments, late payments? I had them all. I soon realized that many of the people I know we’re in the same situation as me. As a seasoned real estate investor,

Qualifying and Getting Approved FHA Home Loan With Bad Credit Illinois in 2022

I dealt with hundreds of mortgage lenders during my 20-year real estate career and decided in helping folks who needed a home loan with bad credit. I specialize in helping folks who are seeking FHA Home Loan With Bad Credit Illinois and who were in the same situation as myself. More than 75% of our borrowers are folks who have gotten denied a mortgage loan from another lender due to the lender’s overlays.

Non-Occupant Co-Borrower Guidelines on Home Loans With Bad Credit In Illinois

Most folks have pride and are embarrassed due to their prior bad credit history. But being a person with prior bad credit, I fully understand that it can happen to the very best of us and sometimes these circumstances are beyond our control. The mortgage business really sucks due to the many rules and regulations.

FHA Loans For Bad Credit in Illinois

FHA loans are the most popular mortgage loan program for homebuyers with bad credit in Illinois. We will cover several home loans with bad credit in Illinois mortgage programs. We will start with FHA loans in Illinois. Helping home buyers secure FHA loans in Illinois who thought they could never ever get a mortgage loan again is the most rewarding part of our business at Gustan Cho Associates.  Most of our mortgage loan borrowers at Gustan Cho Associates are not just our clients, but lifelong friends. A few of them were so grateful that they either became mortgage loan originators or are in the process of getting licensed as mortgage loan originators. One such borrower who is now one of my best friends and a partner in the mortgage business is Daniel Diaz.

Home Loans With Bad Credit in Illinois For First Responders

Daniel Diaz just wrote me a testimonial letter to share with my readers. I met Daniel Diaz as a client but we really hit it off in a very short period of time. Daniel Diaz is a veteran Chicago Police Officer who is larger than life and who cares more about others than he does himself. Like me, Chicago Police Officer Daniel Diaz has been a victim of this country’s greatest recession and did not think he can ever become a homeowner again due to his previous foreclosure and credit issues.

Homes For Police Officers, Firefighters, and Doctors

Homes For Police Officers, Firefighters, and Doctors

Daniel Diaz was once a mortgage broker and real estate broker. However, given both careers up due to the real estate and mortgage meltdown. Officer Daniel Diaz then spoke with a fellow police officer who referred me to him. Officer Diaz was literally in tears when he got the news that he is approved/eligible per Fannie Mae’s Automated Underwriting System. I represent wholesale mortgage lenders with no mortgage lender overlays and as long as you get an automated approval if your final approval. With a credit score under 600 FICO score, the Diaz family can now go and purchase a home with the maximum loan amount of $429,680.  Daniel Diaz realizes that there are thousands of folks he can help out, especially his fellow police officers, firefighters, and first responders. Daniel Diaz’s passion to help people made him get his mortgage loan originator license and become my partner in the mortgage business.

Below is a testimonial from Officer Daniel Diaz:

“Brother this is my testimonial.
 “I am a Chicago Police Officer and I want to send this out to as many people as I can reach that want to buy or refinance a house but due to the recession and horrible market you can’t. I am a proud Chicago Police Officer and have served the city of Chicago since 1993. During the real estate boom I was also a realtor and enjoyed every minute of it. It allowed me to take care of my family and I was able to help a lot of people buy a home and helped many others with refinancing. The thought of our economy and the real estate market completely going belly up never crossed my mind but when it did and it was plastered on every TV set and newspaper I knew we were in trouble. As for me, I owned a primary home and an investment home and  like so many I had several credit cards and a couple loans. I thought that this was going to be a temporary thing but as the weeks turned to months and the news that the housing market was headed for a recession I knew This was the beginning of the end.  People were trying to sell their investment homes so to avoid foreclosure and no one was buying anything. I tried to sell my investment home as quick as I possibly could as well but so was everyone else. I remember when my tenants one after the other called me to tell me that they had lost their jobs and if I could wait for the rent til they got back on their feet. All I kept thinking was Oh my God, I might lose my building if I cant sell it. That wasn’t it. As for my relators license, I gave it up  after the market crashed. I was working very hard and was bringing home two paychecks and now I was down to one but the bills kept coming in. I tried everything  to sell my building but there wasn’t a buyer to be found. After a little over a year and none of my tenants paid rent I had to turn in the keys to my investment home. My credit cards were maxed and I couldn’t pay the monthly minimum. I was trying to work every part time job I could get my hands on. Security at a store, at a parking lot and even spending the night working at a construction site making sure no one got in. This to try to catch up to my bills and recreate that other check I was making but I couldn’t catch up. I am a father of four beautiful kids and my only son who I adore has autism which made this that much more difficult. After working my primary job and trying to work all my part time jobs to no avail. The reality of losing my house started to become the reality I was trying to avoid. After several months of trying to modify my mortgage to possibly keep my home the bank wasn’t interested in helping me. My nightmare was here. We went thru all the legal steps and struck a deal with the bank that we would turn In the keys to our beautiful home and that would be that. It was a very hard for me but I understood that the real estate market just wasn’t coming back. I was able to rent a house and after a few years went by I tried to maybe buy a house. I went to several mortgage brokers and it was the same thing. Because of my credit which was only affected because the recession I couldn’t qualify for a new loan because of my overlays ” bad history of open or closed  credit, foreclosures” I couldn’t buy a home. I have the income to afford a home but cant get a loan because of my past. I had a 710 credit score before but now I have a 570. How was I ever going to buy a home so I could leave to my kids or use it to help get my kids thru collage when the time came. But most importantly to be a homeowner again. To call it my home not my rental house. I had completely given up on the thought of owning at least for now but when I was at work a friend rode past my squad car to say hi and we started talking and we talked about real estate and I told him how I just couldn’t qualify for a loan and what he said after that has changed my entire life. He told me about a guy that was able to help those who were in my situation and I told him that there’s nothing out there that could help me. He gave me a website and said just give it a try you never know. I cant thank my friend Jimmy Z enough. I got on the website he gave me and a guy named Gustan Cho was on it and as I kept reading what he could do I immediately got on the site www.gustancho.com and applied and a couple hours later a man called me and introduced himself as Gustan Cho and wanted to know if I could answer a couple questions and after verifying what I had put on the application he said what I thought I’d never hear. If you can verify what you put on the application, congratulations. You will be a homeowner again. I didn’t believe him one bit and he laughed and emailed me my approval for a FHA mortgage. I have given him what he needed and I have been shopping for my home. Gustan Cho has called me every day since he first called. He has become a friend and someone that I respect and trust. Someone who understood and helped me step by step to get me where I’m at today. If you have bad credit, a forcloser or a bankruptcy please give Gustan Cho a call. He has truly stood by his word and continues to help me and several of my friends who are in a tough situation because of no fault of their own. As you get to know Gustan  he will tell you of how he also was a victim of the housing market but has bounced back and continues to help so many that have been turned down by so many banks, mortgage brokers and mortgage companies. I am so thankful for my friend Gustan Cho and I want to tell everyone about him. He truly has the magic touch of helping those that have bad credit because of our past and giving us the ability to own our home. If anyone has a doubt or wants to ask questions email me your number and I will call you soon after I get it. If this is your situation don’t waste anymore time dealing with all these other guys that say they can help and after they pull your credit they either don’t call or call a week or two later telling you that they cant help. What I respect about Gustan is that if he cant help you. He will stay on your side helping you with all the assets he has available to help you qualify later. You don’t have to be a Police Officer or a Firefighter to get help. This is for everyone, even our Vets have so many opportunities that Gustan can help you with.
Daniel Diaz, Chicago Police Officer
A client and friend of Gustan Cho”

How to Apply For FHA Loans With Bad Credit in Illinois in 2022

In the following paragraphs, we will cover and discuss buying a home with bad credit in Illinois. I was having a conversation with a colleague who is a Realtor today. The conversation was about the lending process and what expectations are set at the beginning when a Mortgage Loan Officer engages a client in Buying a Home With Bad Credit And Collections in Illinois. There’s a list of “Commandments” are needed to be adhered to as it matters to the lending process. It’s a simple list but can really cause some heartache if not, heartburn if something isn’t obeyed.

Buying Home With Bad Credit in Illinois in 2022

Here are those ten commandments just so home buyers buying home with bad credit and collections know what they are if or when you engage any bank or brokerage:

  1. Thou Shalt NOT change jobs, become self-employed, or quit a job until they close on their home loan
  2. Thou Shalt NOT buy a motorcycle, car, truck, or van. (or you may be living in it!)
  3. Thou Shalt NOT use credit cards excessively or let current accounts fall behind
  4. Thou Shalt NOT spend money you have set aside for closing
  5. Thou Shalt NOT omit debts or liabilities from your mortgage loan application
  6. Thou Shalt NOT buy expensive furniture or open up zero financing furniture credit accounts
  7. Thou Shalt NOT originate any inquiries into credit
    1. Never apply for new credit while in the mortgage application and mortgage approval process.
  8. Thou Shalt NOT make any large deposits without consulting with the mortgage loan officer FIRST!
  9. Thou Shalt NOT change Bank Accounts or transfer money from one bank account to another bank account
  10. Thou Shalt NOT co-sign a loan for ANYONE

Can I Qualify For Home Loans With Bad Credit in Illinois With Collection Accounts?

Thou Shalt NOT Pay off any debt accounts without talking to the mortgage loan originator. Homebuyers can qualify for FHA Loans with bad credit in Illinois. Homebuyers do not have to pay outstanding collection accounts and charge off accounts to qualify. Ok, so if you aren’t clear as to why these are so important, let me give you a word that is most feared in our industry.

Role of Mortgage Underwriters During The Loan Approval Process

Role of Mortgage Underwriters During The Loan Approval Process

Out of all of the people involved in making a loan go, this one is THE most feared. Why? Because it is their job to make sure that borrower and their situation are a “good risk” to lend on. This means they are the ones looking at the borrower’s credit report and trying to see whether or not they are stable versus erratic with borrowing and spending habits. Will, you always be able to afford the loan you’re about to get?. Will you be responsible enough to know that when it’s time to pay you are on time?

What Are The Reasons For Mortgage Denial By Lenders?

The above are just two of a myriad of questions that they will be asking. Never mind that they will be asking even more if you’re doing a construction loan or a 203K loan. Then they get really down into it. ALL of it. From estimates to final values they wail want to know EXACTLY what will happen. They get paid to deny the loans that are the greatest risk. They are also paid to find the best risks that will make the bank or investor pool consistent interest income.

The Three C’s In Mortgage Lending

So for you, the borrower, who needs to show the 3 C’s of Lending;

  • Capacity
  • Character
  • Collateral

It is imperative that home buyers adhere to the eleven commandments above. It serves a greater purpose than just getting you a loan, it serves everyone that it will create enough of a win/win situation that the bank will say, “Ok. The lender will lend X amount of dollars.” Make sure to remember them. There’s an image attached, feel free to download it and paste it to the refrigerator when engaging with a lender. Will want to stay within the parameters.

Can I Buy a Home With Bad Credit in Illinois?

The article Tips On Buying Home With Bad Credit And Collections was written by Gustan Cho who is a veteran real estate investor and expert in commercial lending.  Gustan Cho Associates are direct lenders with no lender overlays. Gustan Cho Associates Mortgage Group are experts in the following:

  • FHA Loans
  • FHA 203k Loans
  • Reverse Mortgages
  • VA Loans
  • USDA Loans
  • Conventional Loans
  • Jumbo Mortgages
  • Alternative Lending
  • Subprime Loans
  • Non-QM Loans
  • Bank Statement Mortgage Loan Programs
  • No Doc Fix and Flip Loans
  • No Doc Investment Property Loans
  • Commercial Blanket Lines Of Credit
  • Hard Money Loans
  • Commercial Loans
  • SBA Loans

How Can I Get Approved For Home Loans With Bad Credit in Illinois?

Everyone with income can qualify for home loans with bad credit in Illinois with credit scores down to 500 FICO and outstanding collections and charged-off accounts. It’s not if I can qualify, it is when you can qualify for home loans with bad credit in Illinois.  Homebuyers who have had a period of bad credit history, that is fine. However, for borrowers who are habitual late payments with recent late payments due to irresponsibility, then it may be a problem.

One-Stop Mortgage Shop | National Reputation of Being Able to do Loans Other Lenders Can’t

Mortgage loan underwriters will look at a borrower’s overall credit history and do understand periods of extenuating circumstances where the borrower may have lost their jobs, gone through a divorce, death in the family, or medical issues.  However, most mortgage lenders will like to see that the mortgage loan applicant has since recovered and re-established credit.  If you have bad credit and are seeking to qualify for home loans with bad credit in Illinois, contact The Mortgage Team at Gustan Cho Associates at 262-716-8151. You can also email us at [email protected] We are available 7 days a week, on evenings, weekends, and holidays.