This BLOG On Mortgage Guidelines On Late Payments In Past 12 Months Was PUBLISHED On September 2nd, 2019
Mortgage Guidelines On Late Payments Versus Lender Overlays:
Borrowers can qualify for home loans with bad credit, prior bankruptcy, prior foreclosures, and outstanding collections.
- However, per Mortgage Guidelines On Late Payments normally require timely payments in the past 12 months
- Furthermore, Mortgage Guidelines On Late Payments on manual guidelines normally require timely payments in 24 months
- One or two late payments is not a deal killer with lenders with no overlays
- Many lenders with overlays require timely payments in the past 12 months
Qualifying For Mortgage With Recent Late Payments
Nobody tries to miss a payment, but there are circumstances that arise where there is no choice.
- Many Americans find themselves deep in debt and sometimes making the house payment is just not an option
- When this happens, there are ramifications
- For the most part, your credit score will take a pretty good whack
- One late payment is not the end of the world in the eyes of Fannie Mae, Freddie Mac, and HUD
- Issues arise when there is more than one late payment on your mortgage or if you require a manual underwrite
- At Gustan Cho Associates, we’ve seen all sorts of credit profiles
- We are able to help most clients or at least put them on a path to qualify as soon as possible
- One of the largest hurdles our borrowers encounter are mortgage late payments or rent late payments
- Even if your rental does not report to the credit bureaus, late payments will still be an issue
Rules And Mortgage Guidelines On Late Payments On Conforming Loans
What are the rules for qualifying with mortgage late payments?
- Conventional Loan – Are Fannie Mae you are allowed one 30-day late payment in the past 12 months
- Any more than one 30-day late payment will result in a “refer with caution” AUS report
- Meaning your loan is not eligible to close
- If you are 60 days late, you must wait for that late payment to be seasoned 12 FULL months before you are eligible
- Please keep in mind the information above will also apply to Second mortgages, HELOC, and manufactured home loans
Mortgage Guidelines On Late Payments On FHA Loans
FHA Loan – FHA can be more forgiving at times.
- We have seen automated AUS approvals with two 30 day late mortgage payments in the past 12 or 24 months
- For this to happen typically you need a higher credit score and cash reserves available after closing costs
- Or even a 10% down payment
- Generally speaking, you are allowed one 30-day late payment just like conventional loans above
- If you do go 60 days or later your loan must be downgraded to a manual underwriting
- Without proper documentation manual underwrites does not allow any late payments in the past 12 months
- No more than 2 30 day late payments in the past 24 months on manual underwriting
Mortgage Guidelines On Late Payments On VA Loans
VA Loan – VA loans really stress the past 12 months of your payment history.
- A rule of thumb is you need to have the past 12 housing payments to be on time
- There are times where you can downgrade to a manual underwrite with one 30-day late payment in the past 12 months
- You cannot have a 60-day or greater, that will result in an automatic “refer/ ineligible” AUS report
- We are experts in VA financing, so reach out to us with any VA question
Getting Mortgage Approval With Recent Late Payments
There are ways to manual underwrite around late payments for FHA and VA loans.
- You must have a documented excuse, such as a hospitalization
- There must be concrete evidence to show that you could not make the mortgage payment on time
- Let’s be honest, with today’s technology you can pay your mortgage from your cell phone
- So it is very hard to have a documented excuse of why you cannot pay
- We are experts in manually underwritten mortgage
- So if you have had late payments, please reach out to us for advice
Mortgage Guidelines On Late Payments On Rolling 30 Day Late Payments
Rolling 30 day late payments, especially on mortgage payments, is often confusing to many folks:
- The guidelines have changed recently and 30 day rolling late payments are now unfortunately considered separate late payments
- Meaning if you have rolled multiple 30-day late payments or are currently rolling 30-day late payments, each month you are late will count against you individually
Loan Program Options In Qualifying For Mortgage With Recent Late Payments
What are your options with late payments?
- NON-QM- NON-QM mortgages DO ALLOW for late payments
- Many late payments for that matter
- With more late payments or longer delinquencies, a larger down payment will be necessary
- These loans also allow for rolling 30-day late payments
- You may obtain NON-QM mortgages just one day after major housing events such as foreclosure, short sale, or deed-in-lieu
- We are experts in NON-QM lending
- If you feel your late payments will not allow you to get a mortgage, a NON-QM loan will be a good option for you
- For further questions or to go over your specific late payment scenario, please call Mike Gracz on 630-659-7644 or text us for faster response
- We have seen every type of late payment possible! We are here to help seven days a week!
- Also available via email on email@example.com
Gustan Cho Associates is one of the very few national direct lenders with no overlays on government and conventional loans. Gustan Cho Associates are also Non-QM and bank statement loan for self-employed borrowers experts. We are available 7 days a week, evenings, weekends and holidays.