Qualify For A Mortgage For A First Time Home Buyer In Illinois

Gustan Cho Associates are mortgage brokers licensed in 48 states

This article is about Qualify For A Mortgage For A First Time Home Buyer In Illinois

To qualify for a mortgage for a first time home buyer in Illinois with little down payment and bad credit is not as difficult as it may seem.

  •  Minimum credit scores required for a 3.5% down payment FHA Insured Mortgage Loan is 580 FICO
  • Homebuyers do not need any closing costs besides the down payment
  • This is because FHA Guidelines On Sellers Concessions allows up to 6% sellers concessions by sellers to pay for home buyers closing costs
  • If there is a shortage of closing costs, then the lender can give lender credit for closing costs to borrowers
  • In order to qualify for a mortgage for a first time home buyer, a person needs to show proof of income for the past two years
  • It has to be verifiable income
  • Borrowers need to provide a two-year residential history
  • First time home buyers who do not have two years of work experience, college can be used as a substitute for work experience
  • Need to provide college and/or trade school transcripts
  • Borrowers who work as a waiter or waitress and get cash tips and do not declare it on income taxes, we cannot use that income to qualify for a home loan for a first time home buyer
  • Need documented income

Qualifying For A Home Loan With Bad Credit

How to Qualify for a Mortgage for Your First Home Buyer in Illinois

First time home buyers can qualify for FHA Loans in Illinois with bad credit:

  • Outstanding collections and charge off accounts do not have to be paid off
  • FHA does require timely payments in the past 12 months
  • FHA allows for the borrower to qualify with prior bankruptcy and/or foreclosures
  • Two-year waiting period after Chapter 7 Bankruptcy discharged date to qualify for FHA LOANS
  • Homebuyers can qualify for FHA Loans one year into a Chapter 13 Bankruptcy Repayment Plan:
    • Need approval of Chapter 13 Bankruptcy Trustee
  • There is no waiting period after Chapter 13 Bankruptcy discharged date to qualify for FHA LOANS.
  • FHA requires a three-year waiting period after recorded date of foreclosure, deed in lieu of foreclosure, short sale to qualify

HUD allows non-occupant co-borrowers to qualify for a mortgage for a first time home buyer.

Income Require To Qualify For A Mortgage For A First Time Home Buyer In Illinois

Homebuyers need qualified income to qualify for a mortgage for a first time home buyer in Illinois. FHA Loans are the best mortgage loan programs for first time home buyers.

  • Homebuyers need to have a full-time job with documented income
  • Income can be salary or hourly
  • Applicants who have consistent overtime time and had consistent overtime income for the past two years can use both full-time hourly income plus overtime income to qualify for a mortgage
  • The past two years overtime income will be averaged

For example, here is a case scenario:

  • If the borrower had overtime income for 2011 was $8,000
  • and for 2012 it was $9,000
  • the income we will use for mortgage qualification will be $9,000
  • which is the average of the two years overtime

Most borrowers make the same annual income for the two years:

  • But if one year is higher than the other, we either average the two years of annual full-time income
  • Or we take the lower of the two years annual full-time income

Credit Tradelines Needed To Qualify For A Mortgage For A First Time Home Buyer

What Income Is Required To Qualify For A Mortgage For Your First Home Buyer In Illinois

To qualify for a mortgage for a first time home buyer, most mortgage lenders want to see that the mortgage loan borrower has at least three credit tradelines and that those credit tradelines payments have been paid on time for the past twelve months.

  • Examples of credit tradelines are credit cards, student loans, auto payments, and other installment loans
  • Borrowers who do not have the three traditional credit tradelines, we can use nontraditional tradelines
  • Examples of non-traditional credit are rent payments, cable payments, and cellular phone payments
  • It is important that whenever people pay their bills like rent payments to pay it by check
  • This is because a mortgage underwriter will want to see canceled checks as proof of payment
  • This is in the event if they use nontraditional credit to qualify for a mortgage for a first time home buyer

There will be a credit check that will be used to qualify a mortgage loan borrower and see if home buyers meet the minimum credit score requirements.  Credit scores are extremely important and having a good credit score will qualify you for a better mortgage rate. The Team at Gustan Cho Associates are experts in helping first time home buyers in Illinois with bad credit or little to no credit qualify for FHA Loans. To qualify please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at [email protected] We are available 7 days a week, evenings, weekends, and holidays to take your mortgage inquiry and qualify and issue pre-approvals on home buyers.