In this blog, we will cover and discuss qualifying with non-QM mortgage lenders in Connecticut for borrowers who cannot qualify for qualified mortgages. Gustan Cho Associates (Gustan Cho Associates) are mortgage brokers licensed in 48 states with a large clientele base in Connecticut. The coronavirus outbreak of 2020 took a toll on millions of Americans, especially people and families in Connecticut. Many hard-working American workers have been laid off and many lost their jobs permanently. The global economy was turned upside down with the scare tactics of a viral pandemic. The long-lasting coronavirus shutdown cost many established businesses to close their doors. Workers from all fields were affected financially which affect their finances and credit.
Buy a House in Connecticut Now or Wait a Year?
America has recovered and now we are going through another pandemic-like crisis: Inflation, out-of-control gas prices, a national crisis on shortage of goods and supply, surging interest rates, and skyrocketing home prices. Many people are worried they may get priced out of the Connecticut housing market with the out-of-control home prices. Nobody has a crystal ball, but hundreds of self-proclaimed economists and real estate experts have been forecasting a housing bubble since the start of the coronavirus pandemic. Oops. Home prices did not make a dent and keeps on increasing.
Can I Buy a House in Connecticut With Poor Credit?
Nobody has a crystal ball, and everyone, especially the so-called experts and professional financial forecasters predicted a housing correction and stock market crash. Let’s not forget about the interest rate forecast that rates are going to be stable through 2023. Whatever the economists, analysts, and experts forecasted, it went the other way. From the look of things, home prices do not seem to be slowing in Connecticut and the rest of the country anytime soon. Like the stock market, you and only you, the homebuyer, can make the decision of whether or not to buy a house in Connecticut now or wait until next year.
Non-QM Mortgage Lenders in Connecticut For Bad Credit
A frequently asked question we get often at Gustan Cho Associates can I buy a house with bad credit and credit scores down to 500 FICO in Connecticut? Are there non-QM mortgage lenders in Connecticut who can help qualify homebuyers with bad credit? Many who filed for bankruptcy and/or had their debts go into collection have one concern in common.
Non-QM Mortgage Lenders in Connecticut One Day Out of Bankruptcy and Foreclosure
If I can’t qualify for Qualified mortgage loans due to recent significant credit events, is there an alternative non-QM mortgage lender in Connecticut? The answer is a definite YES. Not all lenders in Connecticut have the same mortgage requirements on government and conventional loans. FHA loans are the most popular mortgage loan program in the United States. Homebuyers can qualify for a 3.5% FHA loan or other mortgage loan program in Connecticut. In this article, we will answer the question if a homebuyer can get a mortgage
How Can I Buy House Under 600 FICO in Connecticut
Homebuyers can qualify for FHA loans in Connecticut with the following:
- Low Credit Scores
- Low Down Payment
- Outstanding Collections
- Outstanding Charge Offs
- Late Payments
- 2 Years After Chapter 7 Bankruptcy discharged date
- Home Buyers Can Qualify For FHA Loans One Year Into A Chapter 13 Bankruptcy Repayment Period
- There Is No Waiting Period After A Chapter 13 Bankruptcy Discharged Date To Qualify For A FHA Mortgage
- Outstanding Judgments And Tax Liens With A Written Payment Agreement And Three Months Of Payments To IRS And/Or Judgment Creditor
- Three Years After The Recorded Date Of Foreclosure Or Deed In Lieu Of Foreclosure
- Three Years After Short Sale Date
Non-QM Loan Requirements in Connecticut
Non-QM loans in Connecticut are alternative mortgage programs designed for borrowers who either cannot qualify for a qualified mortgage due to one or more of their mortgage guidelines. Non-QM loans are not always necessarily for bad credit borrowers. Many non-QM borrowers have great credit and income but may have one or more factors they need to opt for non-QM loans versus Qualified mortgages.
Who Are Non-QM Loans For?
How can I buy house with under 600 FICO in Connecticut with low credit scores? Homebuyers with under 600 Credit Scores can qualify for FHA and VA loans. Not all borrowers can qualify for VA loans. You need to be an active and/or retired member of the U.S. Military with a certificate of eligibility (COE) to be eligible for VA loans. FHA and VA loans are the two loan programs that allow mortgage approvals with credit scores down to 500 FICO.
Qualified Lenders Versus Non-QM Mortgage Lenders in Connecticut
Homebuyers require a 580 FICO to qualify for a 3.5% down payment home purchase FHA loan in Connecticut. FHA lenders in Connecticut require that the mortgage loan borrower has at least a 580 FICO credit score for a 3.5% down payment FHA loan in standard and high-cost counties in Connecticut.
Non-QM Mortgage Lenders In Connecticut For 550 Credit Scores
Homebuyers with credit scores between 500 FICO and 579 FICO can qualify for FHA loans in Connecticut with a 10% down payment as long as they get approve/eligible per Automated Underwriting System. Any credit scores at 580 FICO and higher only require a 3.5% down payment. Mortgage lenders prefer higher credit scores for homebuyers since the risk level is lower for higher credit score borrowers. There are huge advantages to having a 620 FICO versus 580 FICO credit score when it comes to pricing of mortgage rates and getting higher debt to income ratio caps.
Non-QM Loan Debt to Income Ratio Requirements
There are many advantages of having a 620 FICO versus 580 FICO credit score: One of the biggest advantages of having a 620 FICO versus 580 FICO credit score is the debt to income ratio caps on borrowers over 620 FICO Versus 580 FICO In Mortgage Qualification. For any borrower with a credit score of lower than 620 FICO, the maximum back-end debt to income ratio allowed is 43% DTI for FHA loans to get an AUS Approval.
How Can I Buy House With Under 600 FICO in Connecticut with Bad Credit?
Homebuyers do not have to pay outstanding collections and charged-off accounts to qualify for an FHA loan in Connecticut. Outstanding collection accounts are separated into two different categories: Non-medical and medical collections. With non-medical collections, 5% of the outstanding collection account balance is used as a hypothetical debt for underwriters to use in calculating the borrower’s debt to income ratio. Medical collections and charged-off accounts are exempt.
How Lower Credit Scores will Impact Debt to Income Ratio Caps on FHA Loans
For borrowers with credit scores over 620 FICO, the back-end debt to income ratio requirement jumps to 56.9% to get an approve/eligible per AUS. Other advantages of having 620 FICO versus 580 FICO credit scores are no verification of rent is normally required on AUS. Another benefit of having 620 FICO Versus 580 FICO In Mortgage Qualification is that rates are substantially lower.
How To Boost Credit Scores For Mortgage
For borrowers who have credit scores below 620, there might be some quick fixes where they can boost their credit scores over 620. Some of the quick fixes to boost credit scores over 620 FICO or higher might be just paying down credit card balances. For maximum credit score optimization, consumers should have their credit card balances below 10% balance of the total credit limit.
Secured Credit Cards To Boost Credit Scores For Mortgage Approval
Other quick fixes might be adding one or more secured credit cards with a minimum of a $500 credit limit. For married borrowers and the spouse has credit cards, then try adding themselves as an authorized user to the spouse’s credit cards. The spouse’s credit card needs to have a perfect payment history and a very low credit card balance in order for this strategy to work. These strategies are sure quick fixes that can boost borrowers’ credit scores by 20 or more points and get over the 620 FICO credit score. The team at Gustan Cho Associates is one of the best non-QM mortgage lenders in Connecticut for having over 170 wholesale lenders in every niche market for owner-occupant, second homes, and investment properties.
Non-QM loan Approval After Being Denied
There are two types of FHA Guidelines:
HUD, the parent of the Federal Housing Administration requires a 580 credit score for homebuyers to qualify for a 3.5% down payment FHA home purchase with an FHA Loan. However, many mortgage lenders require higher credit scores such as 620 to 640 although FHA. Guidelines On Credit Scores to qualify for a 3.5% down payment FHA loan is 580. Lenders can require higher standards than those of HUD Guidelines, especially smaller lower capitalized mortgage lenders. This is called an FHA Lender Overlay and is totally legal.
How Can I Get Pre-Approved With Non-QM Mortgage Lenders in Connecticut
If you are looking for the best of the best non-QM mortgage lenders in Connecticut, give us a shout at Gustan Cho Associates. Gustan Cho Associates has a large presence in Connecticut and over 50% of our clients are borrowers of non-QM mortgages. On government and conventional loans, we have wholesale mortgage lenders with no lender overlays on FHA, VA, USDA, and Conventional Loans. Gustan Cho Associates have lending relationships with many non-QM mortgage lenders in Connecticut for every loan program available. Homebuyers who need a lender licensed in multiple states with no lender overlays on government and conventional loans can contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at email@example.com. We are licensed in multiple states and are available 7 days a week, on evenings, weekends, and holidays.