Borrowers Shopping For Home Loan

Advice For Borrowers Shopping For Home Loan

There are so many mortgage regulations implemented by regulators with regards to advertising. Mortgage regulators want consumers to shop for the best mortgage rates and terms. Shopping For Home Loan is what is recommended by mortgage regulators. Commercial loans and residential loans are different. Mortgage regulators do not have the tough strict mortgage regulations when it comes to commercial mortgage loan programs because they consider commercial real estate investors sophisticated investors. However, there are so many mortgage regulations when it comes to residential mortgage loans by mortgage regulators where it is often confusing and difficult to understand not just for consumers but for mortgage professionals as well. Again, the main purpose for regulators implementing all of the mortgage regulations and guidelines is to encourage mortgage borrowers to shop for mortgage loans. Shopping for home loan is great if you are a mortgage loan borrower with over 740 FICO credit scores, 40% debt to income ratios, perfect credit payment history, no prior bad credit, no prior bankruptcies and/or foreclosures,  Unfortunately, this is not how our world works. Many hard working Americans fell victim to the Great Recession of 2008, has loss of businesses and/or jobs, went through divorce, had medical issues, or had other extenuating circumstances where it affected their flow of income where it has affected their credit scores. Shopping For Home Loan for the best mortgage terms and rates is often not a choice for many home buyers who have less than perfect credit or those with high debt to income ratios. Mortgage lenders will not just look at your credit scores, but will also look at your past credit payment history as well as prior bad credit and want to see that you have re-established your credit and have been timely on all of your payments for the past 12 months.  What good is it what the mortgage rates are if you do not even qualify for a home loan due to lower credit scores and/or prior poor credit.

The mortgage industry is extremely regulated that regulators will set the maximum mortgage rates that they can charge a mortgage borrower. Quality Mortgage, QM, and high cost mortgage rules are in full force where it is impossible for residential mortgage lenders to gouge consumers on mortgage rates.

Shopping For Home Loan With Bad Credit

Shopping For Home Loan for consumers with low credit scores can be challenging. Most mortgage lenders have investor overlays which is additional guidelines that are set by the individual mortgage lender that is on top of the federal minimum mortgage lending guidelines. For example, to qualify for a FHA Loan, FHA has the minimum credit score requirements that a FHA Borrower needs which is set at 580 FICO credit scores. However, if you go to any bank or mortgage lender to get a pre-approval for a FHA Loan and your credit scores are 580 FICO, you will be surprised on how many mortgage lenders will tell you that you do not qualify because you do not meet their 640 FICO credit score. How can a mortgage borrower go shopping for mortgage with a 580 FICO credit score when the bank or mortgage lender tells you that they don’t even want you even if you meet the minimum FHA Guidelines On Minimum Credit Scores Required¬†? Most of the borrowers who call me have been told that they do not qualify because they do not meet their mortgage lender overlays. Another common case scenarios I get is FHA does not require that FHA borrowers to pay off outstanding unpaid collection accounts and charge offs to qualify for a FHA Loan. However, most banks and mortgage lenders require that all outstanding collection accounts and charge off accounts be paid off in full and that a zero balance to be reflected on their credit reports. This is not a FHA Guidelines and it is the bank’s or mortgage lenders own overlays. Overlays are additional requirements that are implemented by each individual mortgage lender that is above and beyond HUD’s mortgage lending guidelines. Shopping For Home Loan is great but most borrowers with prior bad credit or high debt to income ratios go shopping for home loan not because to get the best mortgage rates or best mortgage terms but just to get qualified for a home loan.

Shopping For Home Loan: Case Scenarios

Shopping For Home Loan is recommended by mortgage regulators so borrowers can get the best rates and mortgage terms. Unfortunately, most borrowers with bad credit and high debt to income ratios are limited in shopping for home loan for best mortgage rates and terms. Shopping For Home Loan for those with prior bad credit and higher debt to income ratios can be challenging, however, if you are looking for a mortgage lender who has very little lender overlays or no lender overlays, please contact me at 262-716-8151 or email me at My staff and I are available 7 days a week, evenings, weekends, and holidays to take your phone calls or inquiries via email to answer any and all of your questions.

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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