Recent Late Payments Mortgage Guidelines With Non-QM Loans

Gustan Cho Associates
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Recent Late Payments Mortgage Guidelines With Non-QM Loans

This BLOG On Recent Late Payments Mortgage Guidelines With Non-QM Loans Was PUBLISHED On May 30th, 2019

Recent Late Payments Mortgage Guidelines
Gustan Cho Associates

Mortgage Borrowers can qualify for traditional government and conventional loans with prior bad credit.

  • Outstanding collections and charge off accounts do not have to be paid off to qualify for government and conventional loans
  • Home buyers can qualify for mortgages after bankruptcy after meeting the mandatory waiting period requirements
  • Repossessions and high-balance charge off accounts do not have to be paid to qualify for home mortgages
  • However, recent late payments mortgage guidelines state that borrowers need timely payments in the past 12 months to qualify for government and conventional loans in order to get an approve/eligible per automated underwriting system (AUS)
  • Now, borrowers with recent late payments in the past 12 months can qualify for non-QM loans

In this blog, we will discuss Recent Late Payments Mortgage Guidelines with non-QM loans.

What Are Non-QM Mortgages

What Are Non-QM Mortgages
Gustan Cho Associates

Non-QM Mortgages are portfolio loans that do not conform to government agency nor conventional lending guidelines.

Non-QM Mortgage Rates depends, on the borrowers’ credit scores, the down payment, the type of property, and the longevity after bankruptcy and/or housing event. Non-QM Loans are becoming increasingly popular among home buyers.

Recent Late Payments Mortgage Guidelines Case Scenario

Recent Late Payments Mortgage Guidelines Case Scenario
Gustan Cho Associates

Let’s take a case scenario.

  • Let’s say John Smith recently sold his home and made a substantial profit due to the equity he had on this home
  • His mortgage loan balance is now paid off and has no mortgage
  • However, he had multiple late payments on his mortgage in the past 12 months
  • John Smith will have a hard time to qualify for a new mortgage on his next home purchase due to the late payments in the past 12 months on his previous mortgage
  • This still holds true even though he sold his home and has his previous mortgage payment paid off
  • Recent Late Payments Mortgage Guidelines on government and conventional loans require timely payments in the past 12 months to get an approve/eligible per automated underwriting system (AUS)
  • One or two late payments in the past 12 months is not always a deal killer
  • However, multiple late payments in the past 12 months will be an issue in getting an approve/eligible per AUS
  • The good news is that John Smith can qualify for non-QM Loans with late payments in the past 12 months. 10% to 20% down payment will be required

Non-QM mortgage rates are higher than government and/or conventional loans. After a year, John Smith can refinance the non-QM Mortgage to a traditional government and/or conventional loan.

Borrowers who have more questions on this blog or other mortgage topics, please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com.

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