Solutions In Qualifying For Home Loan With Recent Late Payments
This ARTICLE On Solutions In Qualifying For Home Loan With Recent Late Payments Was Written By Gustan Cho NMLS 873293
This blog was written to help borrowers qualifying for home loan with recent late payments in the past 12 months.
- Borrowers can qualify for home loans with bad credit
- Lenders perfectly understand that people often go through hardship during their lives which affect their credit
- However, almost all mortgage lenders want to see perfect payment history in past 12 months
- Most lenders do not want to see any late payments after bankruptcy, foreclosure, deed in lieu of foreclosure, short sale
How Great Recession Affected American Families
The Great Recession of 2008 impacted millions of Americans in one or a combination of the ways listed below:
- Many lost their businesses
- Many lost their jobs they had for decades
- Had to settle for jobs they were overqualified for
- Lost their homes
- Lost their life savings due to the collapse of the stock market
- Had to return back to work after retirement
- Had their home values plummet
- Many homeowners could no longer sell due to having their mortgage balance higher than the value of their homes
- Had to file bankruptcy
How Do Lenders View Recent Late Payments
Many home buyers are under the belief that just because they meet the minimum credit score requirements to qualify for a mortgage. They feel that they do not meet the debt to income ratio requirements.
- This is not the case.
- Lenders will not just look at the credit scores and income
- Mortgage Lenders will review the overall credit report
- Lenders will review the borrower’s payment history
- Home Buyers who were affected by the 2008 Real Estate and Credit Meltdown and had late payments and defaulted on creditors during that period can qualify for home loans with prior bad credit
- Mortgage lenders want to see that borrowers have recouped and re-established credit
- Mortgage Borrowers who had a life changing event like death in family, divorce, or health issues and their credit had suffered during that period, that is acceptable and as long as they have recovered and re-established credit
- However, Qualifying For Home Loan With Recent Late Payments after a bankruptcy and/or foreclosure or other significant life changing event can be an issue if they have late payments after bankruptcy and/or foreclosure
There are two ways on how lenders will view recent late payments:
- Underwriters Discretion
- Automated Underwriting System Findings
Recent Late Payments In Past 12 Months
Mortgage lenders frown on any late payments in the past 12 months. All borrowers applications will go through the Automated Underwriting System for an automated approval as well.
- The Automated Underwriting System can render an approve/eligible per Automated Underwriting System Findings with recent late payments.
- If mortgage borrowers get an automated approval with recent late payments, that is fine with a lender like us, The Gustan Cho Team at USA Mortgage.
- However, lenders with overlays may not approve the mortgage loan.
- For borrowers who do have recent late payments, Qualifying For Home Loan With Recent Late Payments should be no issue with a lender that has no overlays like us.
Qualifying for home loan with recent late payments is often challenging because most mortgage lenders require timely payment history on all payments for the past 12 months.
- Many mortgage lenders consider a 30 day late payment an internal overlay and will not proceed with processing and underwriting a mortgage loan application.
- They do not care of any excuses whether the family dog was in the hospital, wife had a baby, or the borrower had to attend a funeral.
- Bottom line is a a 30 day late payment on any credit payments can be a cause for a mortgage loan denial.
- Although mortgage borrower might have stellar credit for many years, a 30 day late payment within the past year can be a deal killer, depending on the mortgage lender.
Solutions And Advice In Qualifying For Home Loan With Recent Late Payments
I advise my mortgage loan borrowers who had a recent 30 day late payment reported on their credit bureaus to contact the creditor and see if they will show mercy and give them a one time reprieve and delete the 30 day late payment history.
- Mortgage Borrowers have had the credit account for some time and been timely and you just got a recent late payment, the chances are great that the creditor will remove the 30 day late payment history.
- However, borrowers who had a history of late payments with the particular creditor, the chances are extremely slim that they will remove it.
- In the event if borrowers have had timely monthly payment history with the creditor and the phone representative says that they cannot remove the late payment history, then politely ask to speak to a supervisor or manager and plead your case with them.
- Many will be surprised how many times my borrowers got a 30 day late payment history deleted off their credit reports by not just giving up with the phone representative and asking to speak with a credit manager.
Overlays In Qualifying For Home Loan With Recent Late Payments
- So even if the AUS automated approval may say it is approved, the lender may say that they will not do the deal due to their overlays.
- Qualifying For Home Loan With Recent Late Payments is no problem and you should get your home loan approved with a lender with no overlays.
Home Buyers who are looking in getting Qualifying For Home Loan With Recent Late Payments with a direct lender with no mortgage overlays on government and conventional loans, please contact The Gustan Cho Team at Loan Cabin at 262-878-1965 or text Gustan Cho at 262-716-8151. The Gustan Cho Team at USA Mortgage has no overlays on government and conventional loans and we just go off finding of the Automated Underwriting System. Borrowers can also email us at firstname.lastname@example.org.