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

This BLOG On How To Qualify For A Mortgage For A First Time Home Buyer In Illinois Was Updated On May 18, 2017

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
  • Home buyers do not need any closing costs besides the down payment because FHA Guidelines On Sellers Concessions allows up to 6% sellers concessions by sellers to pay for home buyers closing costs
  • If there is shortage of closing costs, then 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 two year residential history
  • First time home buyers who do not have two years 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 your income taxes, we cannot use that income to qualify for a mortgage for a first time home buyer. Need documented income.
  • 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 past 12 months.
  • FHA allows for borrower to qualify with prior bankruptcy and/or foreclosures.
  • Two year waiting period after Chapter 7 Bankruptcy discharged date to qualify for FHA LOANS.
  • Home buyers can qualify for FHA Loans one year into a Chapter 13 Bankruptcy Repayment Plan with approval of Chapter 13 Bankruptcy Trustee.
  • There is no waiting period after Chapter 13 Bankruptcy discharged date to qualify for FHA LOANS.
  • FHA requires three year waiting period after recorded date of foreclosure, deed in lieu of foreclosure, short sale to qualify for FHA Loans.
  • FHA 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

Home buyers 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.

  • Home buyers need to have a full time job with documented income.
  • Income can be salary or hourly.
  • Mortgage 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 you for a mortgage. 
  • The past two years overtime income will be averaged. 
  • For example, If  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 mortgage loan 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

To qualify for a mortgage for a first time home buyer, most mortgage lenders want to see that the mortgage loan borrower have at least three credit tradelines and that those credit tradelines payment 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 non traditional tradelines like rent payments, cable payments, and cellular phone payments. 
  • It is important that whenever people pay their bills like your rent payments that they pay it by check because a mortgage underwriter will want to see cancelled checks as proof of payment in the event if they use non traditional credit to qualify for mortgage for a first time home buyer.

There will be a credit check that will be use 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 Gustan Cho Team 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 call The Gustan Cho Team at (800) 900-8569 or text Gustan at 262-716-8151 or email us at gcho@gustancho.com. 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.

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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