How To Qualify For Mortgage With Bad Credit

1. Mortgage Approval With Bad Credit And Late Payments

* Many consumers have had a period in their lives.

- Borrowers need to meet minimum credit score requirements and debt to income ratio requirements to qualify for particular mortgage programs
- However, just because borrowers meet credit score and DTI requirements does not mean that automatically qualify for mortgages
- Mortgage Underwriters will thoroughly review borrowers credit report and payment history
- Special emphasis will be focused in the payment patterns of the past 12 months
- Also, most lenders will not want borrowers to have any late payments after bankruptcy and/or foreclosure
- Late payments in the past 12 months is not a deal killer
- Also, late payments after bankruptcy and/or housing event is not a deal killer either

2. How To Get Mortgage Approval With Bad Credit
* Times of bad credit due to the following types of extenuating circumstances:

- Unemployment
- Loss of business
- Medical reasons
- Divorce
- Death in the family

Extenuating circumstances often stops the flow of household income streams. This interruption of income affects consumers from paying their bill on time which affects their credit scores. Some folks were forced to file bankruptcy while others had to lose their homes through foreclosure due to extenuating circumstances.

3. Multiple Recent Late Payments

* Borrowers who qualify with the credit score requirements but have a habit of recent late payments, there will be issues. Lenders will require detailed letters of explanation as of why they have recent late payments.

- Borrowers payment history is a reflection on how financially responsible they are
- Most lenders want to see timely payments in the past 12 months
- It will be difficult to get an approve/eligible per Automated Underwriting System (AUS) with multiple late payments in the past 12 months

Gustan Cho Associates are direct lenders with no mortgage overlays on government and conventional loans. Home Buyers who need to qualify for FHA, VA, USDA, Conventional Loans with a lender with no overlays can contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at [email protected]. We are available 7 days a week, evenings, weekends, and holidays.

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