Late Payments: How Do Mortgage Underwriters View Late Payments
Late payments are not viewed favorably by mortgage underwriters when they underwrite a borrower’s mortgage application. All late payments require a letter of explanation and late payments are not deal killers. There are many extenuating circumstances where late payments are inevitable and a good letter of explanation can explain the reason for the late payments.
Payment History Of Past 12 Months
Mortgage underwriters consider payment history an indicator on the mortgage loan borrower’s ability to pay his or her future monthly mortgage payment in time. If you had one or two late payments in the past, the chances are they can be overlooked. However, if you had a history of late payments in the past, the chances are that your mortgage loan application will get denied. History of late payments are viewed by creditors as financial irresponsibility and that the borrower will most likely be late in his or her future credit obligations. Almost all mortgage lenders will not want to approve a mortgage loan borrower who has been late on any monthly credit payment in the past 12 months. Mortgage lenders do not want to see any late payments after a bankruptcy, foreclosure, deed in lieu of foreclosure, or short sale. A few recent late payments with multiple creditors will definitely be a mortgage loan denial. If you had a recent 30 day late payment, the chances are that you need to wait a minimum of six months before any mortgage lender will approve your mortgage loan application unless you have a good excuse where the late payment was not caused by you or an extenuating circumstance that the payment was paid late. The amount of the late payment does not matter. It can be a $5 dollar payment or a $1,000 mortgage payment. The credit impact and damage is the same.
Late Payments: Can A Bad Credit Mortgage Lender Help Me?
I specialize in helping mortgage loan borrowers in Illinois, Florida, Wisconsin, California, and Indiana with prior bad credit and lower credit scores and high debt to income ratios. Over half of my business are from mortgage loan borrowers who have gotten a mortgage denial from banks, mortgage bankers, and credit unions. You can have prior bad credit including open collections and credit scores under 600 FICO and I normally close 100% of all of the mortgage applications I originate since I have wholesale mortgage lenders with no lender overlays in Illinois, Florida, Wisconsin, California, and Indiana. However, having prior bad credit means temporary bad credit at some time before now. If you have recent late payments where you are not paying your bills, I cannot help you nor can any mortgage lender help you. One late payment in the past year should be no problem. However, if you had multiple late payments in the past 6 to 12 months, the chances are that you need at least a 6 to 12 months on time payment history before any mortgage lender can help you.