Mortgage With Good Credit But Recent Late Payments

This Article Is About Mortgage With Good Credit But Recent Late Payments

There are minimum credit score requirements to qualify for a residential mortgage loan.

  • However, borrowers can have issues qualifying for Mortgage With Good Credit But Recent Late Payments
  • Borrowers need to meet minimum credit score requirements
  • However, timely payment history in the past 12 months is normally a must to get an approve/eligible per Automated Underwriting System Approval
  • Borrowers can qualify for Mortgage With Good Credit But Recent Late Payments but the key issue is how many late payments in the past 12 months

One or two late payments in the past 12 months is not a deal killer. Multiple late payments will be an issue.

Minimum Credit Scores Required To Qualify For Mortgage

Mortgage With Good Credit But Recent Late Payments

All mortgage loan programs have minimum credit score requirements:

  • To qualify for FHA Loans, minimum credit scores is 500
  • USDA Loans require a 580 credit score
  • Home buyers with credit scores between 500 and 579, a minimum of 10% down payment is required
  • To qualify for an FHA loan with a minimum 3.5% down payment, a home buyer needs a 580 credit score
  • To qualify for a conventional loan, the minimum credit score needed is 620
  • There are no minimum credit score requirements on VA Loans, however, a 580 score is recommended to get an approve/eligible per Automated Underwriting System (AUS) Approval
  • Jumbo mortgage borrowers need minimum credit scores of 700 or higher
  • NON-QM Loans require a 620 minimum credit score
  • Bank Statement Loans For Self-Employed Borrowers require a 620 credit score

Condotel and non-warrantable condominium mortgage loan borrowers need a minimum of 680 credit scores.

Borrower’s Credit History On Credit Report

Although the above are mandatory minimum credit scores for the particular mortgage loan programs, all mortgage lenders will review the overall credit history of the borrower.

  • All lenders realize that mortgage loan applicants may have periods of bad credit and/or prior bad credit
  • However, recent late payments, especially in the past the 12 months can be a problem in getting a mortgage loan approval even if the mortgage loan applicant has higher credit scores

A lower credit score borrower has a much better chance of getting a mortgage approval than a borrower with a much higher credit score but with recent late payments.

Recent Late Payment In Past 12 Months

Borrower's Credit History On Credit Report

A recent late payment that is reported on the credit report is any late credit payment that is 30 days old.

  • A late payment will be devastating and can lower a person’s credit score by 40 or points
  • It does not matter how much the minimum monthly payment is
  • Whether it is a monthly minimum payment of $5 dollars or $1,000 dollars, a 30-day late payment is considered all the same
  • It will drop credit scores and will affect the way mortgage loan underwriters will view credit profile which can affect the chances of mortgage approval
  • Lenders have a mandatory policy that a mortgage loan applicant has been timely with paying their bills for the past 12 months
  • Other lenders want to see a 24 month on time payment history
  • Banks and credit unions have tougher guidelines when it comes to seeing a 24 month on time payment history
  • Even though borrowers credit score is over 700, one late payment on their credit report can hurt the chances of them getting a mortgage approval
  • If the borrower is seeking to do a refinance mortgage loan and has late payment history on their current mortgage in the past 12 months, the chances will be tough for them to get a new refinance mortgage loan
  • May have to wait until they have re-establish their on-time payment on their mortgage for at least 12 months

Most banks and credit unions require 24 months on time mortgage payment history as part of their overlays.

Is It Possible To Get Mortgage With Good Credit But Recent Late Payments

The chances of getting a mortgage loan approval with a bank with late payments in the past 12 months will be very slim.

  • However, mortgage bankers are more lenient when it comes to recent late payment
  • One or two recent late payment at the same time in the past 12 months may be possible with a letter of explanation
  • Mortgage lenders like us will go off AUS Findings
  • Borrowers can get approve/eligible per AUS for mortgage with good credit but recent late payments
  • However, multiple and periodic recent late payment in the past 12 months will be difficult in getting an approve/eligible per AUS
  • Borrowers can qualify with credit scores of over 620
  • But with multiple recent late payment history, chances are they may need to wait until timely payment history has been re-established
  • Borrowers could have had dozens of late payment history for a year
  • However, with re-established credit history for at least 12 months they should get an approve/eligible per Automated Underwriting System
  • It is better to have lower credit scores and timely payments in the past 12 months than a higher credit score and late payments in the past 12 months

The mortgage underwriter will want a letter of explanation as of the late payment history and derogatory credit.

  • Reasons can be such as being out of work but once got yourself re-established after getting full-time employment
  • Found full-time employment and got back on track

Solution To Qualifying For Mortgage With Good Credit But Recent Late Payments

Is It Possible To Get Mortgage With Good Credit But Recent Late Payments

There are potential solutions in taking steps in trying to get the recent late payment removed from credit report.

  • The first solution is to contact the creditor and see if they can give a one time break and see if they can remove the late payment record
  • Consumers with a history of paying bills on time with the particular creditor and just got a recent late payment on record, the chances are that the creditor may remove the recent late payment history
  • If the representative on the phone says no to request, ask to speak to a supervisor
  • Please be as polite as possible and see if the supervisor for mercy and have the derogatory late payment removed for a one time deal

Consumers will be surprised by how many times a creditor will work with them.

Multiple Recent Late Payments

Borrowers history of paying bills on time and have multiple late payment history on credit report but have decent credit scores may encounter problems in getting automated AUS Approval.

  • However, will be able to qualify for a mortgage loan if the late payments on credit report ages
  • Worst case scenario, borrowers may have to wait one year of making payments on time
  • However, there are mortgage lenders that will approve Mortgage With Good Credit But Recent Late Payments with an AUS Approval
  • No matter how small the monthly payment is consumers need to pay monthly minimum payments on time
  • One or two recent late payment can plummet credit scores and will most likely delay chances of getting a mortgage loan approval

Gustan Cho Associates does not have any mortgage overlays on government and conventional loans. Borrowers can qualify for a mortgage with good credit but recent late payments with an AUS Approval. All manual underwriting requires timely payments in the past 12 months. Please contact us at 262-716-8151 or text us for a faster response if trying to qualify for mortgage with good credit but recent late payments. Or email us at gcho@gustancho.com.

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5 Comments
  1. Roseline Oliver says

    I thought I’d post it in the general comments for anyone to see that needs help. I have had great success raising my credit score by using the “Tom Lawrence” service. I used to have debt and inquiries on my report until I came across this genius whom my co-worker revealed how he had helped many repair their credit. I contact him and explained to him how bad my credit is and how it had affected me drastically. He told me he would help me clear all debt, remove inquiries and increase my credit score to 800s and that was exactly what I got. I was able to get approval of a credit card without a hard pull, for capital one (2500), credit one (6000), and Key Jewelers (3000). What got me to amaze was the high limit. I charged about $75 a month and paid them almost off by the end of the month. Every 45-60 days I requested a credit increase online. My credit is now 805, all due to those three cards. Tom also helped My husband repair his credit, had terrible credit – 410 – due to a recent bankruptcy and past-due student loans

  2. Sarah Jayden says

    I have had an EXCELLENT credit score for several years. I receive paper bills in the mail–and schedule a payment the same day (or the next day) the bill is received. I always pay off the balance. Somehow a TV shopping network’s “bank” changed my billing to online and I missed notifications AND two payments. The “bank” called and I paid the balance in full. My credit score went down ONE HUNDRED POINTS, from “excellent” to “good.” I informed the credit company about it and for almost six months nothing was done, I kept getting frustrated because I really need my credit fixed badly. A few months ago I came across Gina Pogol on Quora Instructing a lot of people how to get their credit fixed and saw many positive write-up with proof on how he had helped them out. I checked out http://www.gustancho.com and saw Alex Carlucci’s videos. He was amazing. Alex of Gustan Cho Associates was straight to the point and no bullshit. I did the same by approaching Alex Carlucci on his personal email at alex@gustancho.com, Explained my horrible experience to him, and asked if he could help me out is replied was all positive. One part of me was saying it’s too good to be true and the other side was to give this young man a try (lol), I actually did and the outcome was amazing, My score increase by ONE HUNDRED AND FIFTEEN POINTS and the late payment was rectified, my score changes back to excellent across the 3 credit bureaus. It’s almost six months now and I’m still benefitting from my new scores, Thank you, Gina Pogol and Alex Carlucci of Gustan Cho Associates! I then call the toll-free number of Gustan Cho Associates and was assigned to Michelle McCue. Michelle McCue got me approved and now I am in line to closing my loan and realizing the dream of owning my own home. Thank you again team Gustan Cho Associates

  3. Carl Pesenta

    I would like to buy a HUD home that goes to sealed bid on 4/6. Upon walkthrough and reading the disclosures, it needs all new flooring, paint, 2 bathrooms, new baseboard, torch down roof, concrete walkway and garage floor repair, possibly a new hot water heater, deeeeep cleaning. It would benefit from new cabinets in the kitchen and baths (all original to 1964) and has paneling throughout the 1900 sf house. It has an estimated list price of $203K. My brother is willing to co-sign and loan me the down payment. I make 96,500 but had a rough divorce that I have been digging myself out of so my credit is meh. I have about $9k in outstanding debt. I estimate I could put in 100K to fix it if I can buy it for 100K. It would be my primary residence. I am 59 years old and have not owned a house since 2003. If you can help that would be amazing.

  4. Susan Shriver

    Greetings,

    I am emailing inquiring about the new rules of Fannie Mae and Freddy Mac accepting IBR and Public Service Forgiveness. This is part of my situation. I have over hundred thousand student loans not proud of it but it is what it is. However, I have been on IBR payment and been with Public Service through the State of Arkansas since 2013 and my loans are scheduled to be forgiven in August of 2026. The home I am needing to purchase is around 220,000. I do have my 3% down payment if needed. I currently working on getting my credit cards paid down under 30% next month I should have them paid back. I would like to speak to an actual person to see if it is true and if I have a chance of purchasing a home within the next 5 to 7 months. I look forward do to speaking with you 501-499-7156.

    Thanks

  5. Hildago Sanchez says

    Have approval from Chapter 13 attorney and trustee for a mortgage loan.

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