Tips On How To Get Mortgage That Suits Your Needs
This BLOG On Tips On How To Get Mortgage That Is Right For You Was Written By Gustan Cho
Many borrowers have a hard time on how to get mortgage that they can qualify for. The government wants you to do mortgage shopping for the you to get the best rates and terms. But many borrowers will not qualify for a mortgage loan no matter how many mortgage lenders they go to so how do you do mortgage shopping when nobody is willing to give you a mortgage loan? On this BLOG we will discuss mortgage shopping and what types of mortgage shopping there is for various borrowers. Borrowers can shop for mortgage lenders who have no lender overlays. Borrowers can shop for mortgage lenders who can originate and fund Non-QM Loans. Borrowers can do mortgage shopping for the best mortgage rates and lender credit for a refinance mortgage. Borrowers can do mortgage shopping looking for a mortgage lender where they can do a cash-out refinance mortgage. Borrowers can do mortgage shopping for a second mortgage or a second mortgage lender that can do a 80-15-5 Piggyback Mortgage. Borrowers can do mortgage shopping looking for a mortgage lender that can do a 90% LTV Jumbo Mortgage. There are so many variables with mortgage shopping.
Evaluate Your Credit And Financial Profile
Tips on how to get mortgage is easy if you have perfect credit, low debt to income ratios, and a great payment history on all of your bills. However, this is not the case to many people. Many hard working folks did go through financial hardship and have credit issues. Here are some extenuating circumstances many folks have gone through:
- Loss of employment
- Gaps in employment
- Medical issues
- Death in family
How To Get Mortgage With Collections And Charge Offs
If you have bad credit such as unpaid outstanding collection accounts or charge off accounts, the best mortgage program for you is a FHA Loan since FHA is more lenient with bad credit than Fannie Mae or Freddie Mac. FHA does not disqualify borrowers with outstanding collection accounts and charge off accounts. Many borrowers who come to me with outstanding collections and charge offs were told by other lenders that they do not qualify for a FHA Loan unless they have paid off their unpaid collections and charge off accounts. This is not the case. Here are the FHA Guidelines On Collections And Charge Offs :
- FHA Does Not Require Borrowers To Pay Off Outstanding Collections Accounts
- FHA Does Not Require Borrowers To Pay Off Outstanding Charge Offs
- FHA Exempts Medical Collections From DTI Calculations
- FHA Requires Any Non-Medical Collections With Total Aggregate Balances Of Over $2,000 The Following: 5% of the outstanding unpaid balance needs to be used as a monthly debt of the borrower and used towards calculation of borrower’s debt to income ratio even though the borrower does not have to pay and/or if the borrower has a written payment agreement with the creditor or collection agency, that amount agreed upon can be used as the monthly debt in the calculation of the borrower’s monthly debt in the DTI calculation in lieu of the 5%
- Medical Collections Are Exempt From Credit Disputes
- Charge Off Accounts Cannot Have Any Credit Disputes
- Zero Balance Non-Medical Collection Accounts And Any Non-Medical Collections With Under $1,000 Aggregate Total In Unpaid Outstanding Balance Can Have Credit Disputes
How To Get Mortgage After Bankruptcy And Foreclosure
Due to the above reasons, many folks have gone through tough financial and credit issues but over time they have recovered. However, many lenders will look at the borrowers overall payment history that reflects on their credit report and just because they have overcome their credit and financial issues and are stable, lenders do look at the borrower’s past. Here are some issues many borrowers are faced with and come to me and ask me help on how to get mortgage:
- Prior bankruptcy: Borrowers can qualify for a FHA Loan 2 years after a Chapter 7 Bankruptcy discharged date. Borrowers can qualify for a FHA Loan one year into a Chapter 13 Bankruptcy Repayment Plan. Borrowers can qualify for a FHA Loan with no waiting period after a Chapter 13 Bankruptcy discharge date. Borrowers can qualify for a Conventional Loan four years after a Chapter 7 Bankruptcy discharged date. Borrowers can qualify for a Conventional Loan four years from the discharge date of the Chapter 7 Bankruptcy if they had a mortgage or mortgages as part of their Chapter 7 Bankruptcy no matter when the deed was recorded even though it was after the discharged date of the Chapter 7 Bankruptcy discharged date. However, the deed needs to be out of the borrowers name whether it was a foreclosure, deed in lieu of foreclosure, or short sale.
- There is a three year waiting period to qualify for a FHA Loan after the recorded date of the foreclosure, deed in lieu of foreclosure or the date of a short sale to qualify for a FHA Loan. There is a four year waiting period to qualify for a Conventional Loan after the recorded date of a deed in lieu of foreclosure or date of a short sale. There is a seven year waiting period to qualify for Conventional Loan after the recorded date of a foreclosure.
How To Get Non-QM Loans
Non-QM Loans are non-traditional loan programs such as no income verification loans, bank statement loans, and specialty loan programs such as no waiting period after foreclosure or short sale. Non-QM programs do require more down payments and rates are higher than government and Conventional Loan Programs. The advantage of Non-QM Loans is it gives a home buyer an opportunity to get financing on a residential home loan today instead of waiting to get financing at a later date. This can be a major benefit for home buyers in fast appreciating areas like many parts of Florida and most parts of California, New Jersey, Illinois, and Texas.