Bad Credit Mortgages
Gustan Cho Associates are experts in originating, approving, processing, and closing bad credit mortgages. The team at Gustan Cho Associates are experts in being able to originate and close home loans other mortgage lenders cannot do. Not all license loan officers can do the type of bad credit mortgages Team GCA can. We have a national reputation for being a one-stop mortgage shop. We are licensed in 48 states, including Washington DC, Puerto Rico, and the U.S. Virgin Islands. (Not yet licensed in New York, and Massachusetts). Gustan Cho Associates has a network of over 190 wholesale mortgage lending partners.
Traditional and Non-Prime Mortgage Options
Most residential mortgage lenders normally concentrate on government and conventional loans. Gustan Cho Associates is nationally recognized for no lender overlays on government and conventional loans. Not only do we offer government and conventional loans with no lender overlays, but we have hundreds of non-QM and alternative mortgage loan programs. Gustan Cho Associates has over 190 wholesale lending partners in every niche and specialty mortgage market.
Getting Approved For Mortgage After Being Denied
Over 75% of our clients are borrowers who could not qualify at other mortgage lenders. When other mortgage companies say no, Gustan Cho Associates says yes. Most of our clients could not qualify at other mortgage companies either due to a last-minute mortgage loan denial or due to the lender not having the mortgage loan option that was best suited to them.
Why Gustan Cho Associates Approves Bad Credit Mortgages While The Competition Can’t?
Gustan Cho Associates is a dba of NEXA Mortgage LLC, the nation’s largest and fastest growing mortgage broker. NEXA Mortgage, LLC is also the parent of AXEN Mortgage, a mini-correspondent mortgage lender. Gustan Cho Associates, LLC is licensed in 48 states including Washington DC, Puerto Rico, and the United States Virgin Islands.
With lending partnerships with over 190 wholesale mortgage lending partners, Gustan Cho Associates has access to thousands of mortgage loan programs. We have dozens of wholesale lending partnerships with lenders of government and conforming loans with no lender overlays and dozens of non-QM and alternative mortgage lending partnerships with lenders of niche products.
Gustan Cho Associates Has Hundreds of Wholesale Lending Partners of Bad Credit Mortgages
Some of the popular mortgage loan programs we offer to our borrowers are FHA, VA, USDA, and Conventional loans with no lender overlays. In the following paragraphs, we will cover the most popular bad credit mortgages. There are traditional bad credit mortgages and non-traditional and non-prime bad credit mortgages.
FHA Loans For Bad Credit
FHA Loans is the most popular home loan program for bad credit borrowers. There are instances where borrowers with late payments in the past 12 months cannot qualify for a VA loan but can qualify for an FHA loan. The Veterans Administration has very lenient guidelines on VA loans. However, it is difficult to get a VA loan approval with late payments in the past 12 months. This is not the case with FHA loans.
FHA Loans With Low Credit Scores
You can get an FHA loan approval with lower credit scores. To qualify for a 3.5% down payment FHA loan, you need a 580 credit score. You can qualify for an FHA loan with a 500 FICO credit score. HUD requires a 10% down payment for borrowers under 580 and down to 500 FICO.
You can easily get an approve/eligible per automated underwriting system (AUS) with lower credit scores as long as you have been timely on all of your payments in the past 12 months. As with other mortgage loan programs, it is best to try to maximize your credit scores when applying for an FHA loan. Higher credit scores mean lower mortgage rates.
FHA Loans With 500 Credit Scores
Homebuyers with credit scores down to 500 FICO can qualify for an FHA loan. The minimum credit score requirement for a 3.5% down payment FHA home loan is 580 FICO. Homebuyers with credit scores between 500 to 570 FICO, need a 10% down payment per HUD agency mortgage guidelines. You will not have an issue getting an approve/eligible per automated underwriting system with a 500 credit score if you have a 10% down payment and have been timely on all of your monthly payments in the past 12 months. We will cover more on FHA loans with 500 credit scores on a separate blog on www.gcamortgage.com.
We Are Experts In Qualifying Borrowers For FHA Loan With 500 FICO
FHA Loans With Collections Accounts
Homebuyers can qualify for FHA loans with outstanding collection accounts. You do not have to pay the unpaid collection accounts to qualify for an FHA loan. For collection accounts with an aggregate collection account balance higher than $2,000, mortgage underwriters will take 5% of the outstanding collection balance and use it as a hypothetical debt when calculating the borrower’s debt-to-income ratios.
You do not have to pay anything. It is just a formula being used and the 5% debt is a hypothetical debt. The 5% hypothetical is used in the event the outstanding collection account turns into a judgment down the road. The 5% rule only applies to non-medical collections. Medical collections and charged-off accounts are exempt from the 5% rule.
Get Approved For an FHA Loan With Collections
FHA Loans With Charged-Off Accounts
HUD, the parent of FHA, allows borrowers to qualify for FHA loans with charged-off accounts no matter how large the charged-off amount is. The charged-off account balance can be six figures and it still will not affect the FHA loan approval. The date of last activity on a charged-off account needs to be longer than one year old. Remember HUD as well as other mortgage agencies frown upon the fact if you were late in the past 12 months. It is alright to have derogatory credit tradelines. However, HUD requires you to have been timely in the past 12 months.
FHA Loans During Chapter 13 Bankruptcy
Homebuyers in an active Chapter 13 Bankruptcy Repayment plan is eligible to qualify for an FHA loan during the repayment period of Chapter 13. The Chapter 13 Bankruptcy does not need to be discharged. To be eligible for FHA loans during the Chapter 13 Bankruptcy repayment period, the mortgage loan applicant needs to have made 12 satisfactory monthly payments and get the approval of the bankruptcy trustee.
Many homebuyers are afraid of getting approval from the bankruptcy trustee for a mortgage. This is a non-issue. The team at Gustan Cho Associates has closed thousands of FHA loans during the Chapter 13 Bankruptcy repayment period and has not yet gotten a denial for a home mortgage from a bankruptcy trustee.
Get Approved For an FHA Loan During Chapter 13 Bankruptcy
FHA Loans After Chapter 13 Bankruptcy With No Waiting Period Requirements
There are no waiting period requirements after Chapter 13 Bankruptcy to qualify for an FHA loan. If the Chapter 13 Bankruptcy has not been discharged for at least two years, it needs to be a manual underwrite. Gustan Cho Associates has no lender overlays and just follows HUD agency mortgage guidelines.
Most lenders will require a one or two-year waiting period after Chapter 13 Bankruptcy for homebuyers. This additional requirement by the mortgage lender is the lender’s agency guidelines. To qualify for FHA loans after Chapter 13 Bankruptcy with no waiting period, the borrower needs to have timely payments on all of their monthly payments for the past 12 months.
Manual Underwriting Mortgage Guidelines
FHA and VA loans are the only two mortgage loan programs that allow manual underwriting. Manual underwriting is when the borrower cannot get an approve/eligible per automated underwriting system and gets a refer/eligible per automated underwriting system findings. To qualify for FHA and VA manual underwriting guidelines, you need timely payments in the past 12 months. However, VA loans have more lenient guidelines on manual underwriting. You can qualify for a VA manual underwrite with only timely payments in the past 12 months. F FHA manual underwriting guidelines require 24 months of timely payments.
Get Approved For an FHA Loan After Chapter 13 Bankruptcy
FHA Loans With Late Payments
Homebuyers can qualify for FHA loans with late payments in the past 12 months with a larger than 3.5% down payment. HUD, the parent of FHA, is very forgiving for homebuyers with late payments in the past 12 months. With a large down payment, HUD will render an approve/eligible per automated underwriting system for borrowers with late payments in the past 12 months.
Qualify For an FHA Loan With Late Payments
VA Loans For Bad Credit
Homebuyers can qualify for VA loans with bad credit as long as the borrower has been timely in the past 12 months with all of their monthly payments. VA loans have lenient mortgage guidelines. There are no minimum credit score requirements on VA loans. There is no maximum debt-to-income ratio cap on VA mortgages as long as borrowers have strong residual income. Outstanding collection accounts and charge-off accounts do not have to be paid to qualify for VA loans.
VA Loans With 500 Credit Scores
VA loans are another great option when it comes to bad credit mortgages. The Veterans Administration created lenient guidelines for its active and retired veterans. There are no minimum credit scores on VA loans. The team at Gustan Cho Associates are experts in helping borrowers qualify for VA loans with credit scores down to 500 FICO.
Best VA Mortgage Lenders For Bad Credit
Many VA mortgage lenders require a minimum credit score of 620 or higher. Why is it VA mortgage lenders require a minimum credit score when there are no minimum credit score requirements by the Veterans Administration? Lenders can have higher credit score requirements above and beyond the minimum VA agency guidelines. The higher mortgage lending requirements by individual lenders are called lender overlays. The best VA mortgage lenders are mortgage companies with no lender overlays.
VA Loans With High Debt-To-Income Ratio
Homebuyers can qualify for VA loans with a high debt-to-income ratio. There are no maximum debt-to-income ratio requirements on VA loans. The team at Gustan Cho Associates, Inc. has closed countless VA loans with debt-to-income ratios exceeding 60%. As long as the borrower has strong residual income, they can normally get approve/eligible per the automated underwriting system on VA loans with debt-to-income ratios as high or higher than 65% DTI. Most lenders will have lender overlays on debt to income ratio on VA loans. However, Gustan Cho Associates is one of the best VA mortgage lenders with no lender overlays.
VA Mortgage Lender With No Overlays
