3.5% Down Payment With Under 620 FICO Scores
If you are a mortgage loan borrower in Illinois, Florida, California, Wisconsin, or Indiana and have under 620 FICO credit scores and are having a hard time getting approved for a residential mortgage loan, you are in luck. As long as your credit scores are at least 580 FICO scores and your back end debt to income ratios does not exceed 43%, the chances are that you will get a mortgage loan approval. If your credit scores are over 620 FICO, then your back end debt to income ratios are capped at 56.9%.
Under 620 FICO: Mortgage Lending Guidelines
Most mortgage lenders do have their own mortgage lending guidelines and probably will not entertain any mortgage loan borrowers that do not have at least a 640 FICO credit score. This is not a FHA mortgage lending guideline but the mortgage lender’s own mortgage lender overlay. FHA only requires that the mortgage loan borrower have a 580 FICO score to qualify for a 3.5% down payment residential mortgage loan. The good news is that I can help mortgage loan borrowers in Illinois, Florida, Wisconsin, Indiana, and California with under 620 FICO. I represent dozens of wholesale mortgage investors who have no mortgage lender overlays and as long as the mortgage loan borrower can get an Automated Underwriting System mortgage approval, I can close the mortgage loan for them as long as whatever the mortgage loan borrower stated on their 1003 mortgage loan application can be verified.
Under 620 FICO: Collections, Late Payments, Charge Offs, Overdrafts
The Federal Housing Administration does not require that open collections be paid off. Charge offs are allowed and older late payments are acceptable. However, recent late payments can be a problem. Mortgage underwriters do not want to see any late payments in the past 6 months. Any late payments in the past 12 months is frowned upon, however, it is not a deal killer if there were extenuating circumstances for the late payment. Never pay off an older collection account because it will plummet your credit scores because it re-activates the derogatory credit item as a fresh derogatory. You full credit report and payment history will be taken into account by the Automated Underwriting System prior to a decision. Again, the Automated Underwriting System will take into account your income, reserves, debts, liabilities, credit, credit history, credit scores, and assets.
Contact Us If You Are Told You Do Not Qualify For A Home Loan By Other Lenders
Again, if you are told no by a bank, mortgage banker, or mortgage broker that they cannot do your mortgage loan in Illinois, Florida, California, Wisconsin, or Indiana because your credit scores are not at least 620 FICO, please contact me at 262-716-8151 or at www.gustancho.com . A larger percentage of my client have under 620 FICO credit scores and 100% of them close on their mortgage loans once they get an approved eligible per DU or LP FINDINGS.