Here at Mortgage Scenarios, our typical client is someone whose dreams have recently been crushed by their current bank or lending institution. As we all know, no two banks are the same and while all banks do have to follow the same federal guidelines, there are many overlays in the mortgage lending world. If you aren’t familiar with lender overlays, you will need to check out previous article HERE 2017 Lender Overlays In its simplest explanation, lender overlays are additional guidelines on loan programs in addition to the published loan guidelines set forth by FHA, VA, Fannie Mae, and Freddie Mac. These take many clients out of the qualifying market when it comes time to buy a home. Many lenders will not even consider a client whose credit score is below 620 and some require a score as high as 660. This is not what the HUD and FHA guidelines say as the minimum FICO score needed for a 3.5% down payment loan is only 580 FICO and given compensating factors and down payments, it can go as low as 500 FICO. What lenders are trying to do with these additional guidelines is to ensure more “quality” borrowers who will more than likely have easier loans to close and aren’t as risky as others. We at Mortgage Scenarios feel this is a horrible thing to do which is why we only work with lenders who have zero lender overlays so we can offer mortgage products to truly anyone who meets the loan program guidelines.
For many loans such as VA loans, there is not a minimal credit score requirement. While banks do use a tri-merged credit report as a main factor to qualify borrowers, keep in mind this is not the only thing you need to worry about. There are many clients who have charged off accounts reporting to the credit bureaus. Many clients think these charge offs will immediately take you out of the housing market and prevent them from home ownership. However, this is not the case, you just need to find the right lender and a knowledgeable loan officer which is where Mortgage Scenarios comes into play with our expert staff who is prepared with any situation that you may be facing. When you get in touch with us you will directly with your loan officer and won’t be passed around a call center like your banks or larger lenders. We can guarantee a delivery of a custom plan to get you to home ownership so just in case you don’t qualify today, we can give you the steps to become homeowners in the future.
Another gray area in the lending world comes from qualifying for a home loan after filing bankruptcy. Please see our CHAPTER 13 BLOG for further details. But many of our clients have had bankruptcies in the past or are currently still in a chapter 13 bankruptcy. You don’t need to worry and must let us go over your scenario with you as there could be ways to get a loan without any mandatory waiting period. You can find yourself getting a loan now because if you get your bankruptcy trustee to approve the home loan and have made 12 months of payments to your creditors in a timely manner, this can get you qualified while still being in your repayment plan. Also, if you are near the end of your repayment plan and your discharge is in sight, we are able to get you a loan the day after your discharge without any mandatory waiting periods necessary. You may run into lender overlays from banks and lenders who will still want a mandatory 1-2 year waiting period after a Chapter 13 discharge, but with Mortgage Scenarios that is not the case.