Home Purchase Mortgage Loan With Bad Credit And Low Credit Scores

This BLOG On Home Purchase Mortgage Loan With Bad Credit And Low Credit Scores Was Updated On May 15, 2017

Many renters who are looking for  Home Purchase Mortgage Loan With Bad Credit And Low Credit Scores have the fear of applying for a home purchase mortgage loan because they think their credit is too bad and think they will get rejected.

  • Whatever the credit score is, whether it is in the 400s or 600s, it can be improved by some quick credit fixes.  
  • Consult with a loan officer.
  • The mortgage loan officer will evaluate mortgage applicant’s credit profile and guide them in qualifying for a home purchase mortgage loan program that benefits them.
  • For mortgage applicants who quite do not qualify, the loan officer will guide them in advising them on what they need to do to qualify.

FHA Guidelines On Bad Credit And Low Credit Scores

FHA Guidelines Are The Following On Bad Credit And Credit Scores:

  • Minimum credit scores to qualify for FHA Loan is 580 FICO for 3.5% down payment home purchase mortgage loan
  • Home buyers with credit scores between 500 FICO and 579 FICO can qualify for FHA Loans with 10% down payment
  • FHA mortgage applicants can have bad credit to qualify for FHA Loans
  • Outstanding collections and charge offs do not have to be paid off to qualify for FHA Loans
  • However, FHA does require that FHA borrower been timely on all of their monthly payments for past 12 months
  • There is a two year waiting period after having a bankruptcy discharged for a home purchase mortgage loan applicant to be able to apply for FHA Loans. 
  • Home buyers can qualify for FHA Loans one year into a Chapter 13 Bankruptcy Repayment Plan with Trustee Approval
  • There is no waiting period after Chapter 13 Bankruptcy discharged date to qualify for FHA Loans
  • There is a three year waiting period after a foreclosure for a mortgage loan applicant to qualify for FHA Loans. 
  • The three year waiting period after short sale to qualify for FHA Loans.
  • There is three years  waiting period after the recorded date of the deed in lieu of foreclosure and/or from the date of the sheriff’s sale of the home or from the date the name of the deed was transferred out of the owner’s name to qualify for FHA Loans . 

Home Purchase Mortgage Loan Programs

Housing prices are still at an all time low but it is creeping up in value. The Gustan Cho Team has NON-QM Loans and Alternative Lending Programs.

  • No waiting period after bankruptcy and foreclosure with non-qm loans
  • Bank statement mortgage loan programs
  • No doc fix and flip loans
  • No doc investment property loans 

Re-Establishing Credit After Bankruptcy And Foreclosure

Consumers who recently had a bankruptcy or foreclosure should start re-establishing their credit as soon so they can rebuild their credit.

  • Credit scores will improve with new credit. 
  • Get 3 secured credit cards and make sure your balances are low. 
  • Always keep balances below the 10% to credit limit. 
  • After the secured credit cards has been seasoned for at least one year, consumers should qualify for unsecured credit cards.
  • Again, always pay down credit cards every month where credit balances remain below the 10% of credit limit. 

Home buyers can contact Gustan Cho at 800-900-8569 or text Gustan at 262-716-8151 for faster response or email us at gcho@gustancho.com.  I am available 7 days a week.

Gustan Cho NMLS ID 873293
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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