Bad Credit Home Loans in MN, WI, SD

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Bad Credit Home Loans

Face it, having bad credit isn't what anyone wants. It effects so many parts of your life. Denied jobs, denied credit, denied housing. Higher rates on car loans, credit cards, mortgages, and even what you pay for car insurance. Most credit didn't get damaged overnight, and it doesn't get repaired overnight. It takes time and effort to rebuild credit. But in the mean time, can you get a home loan with bad credit? The answer is... Maybe.

Credit Scores

Every mortgage company uses a credit report to determine your credit worthiness. All credit activity for the past 7-years is on your report. Good, bad, or otherwise. Foreclosures and bankruptcies show up for 10-years. Obviously paying your obligations on time is important, and missed payments, collections, and judgements hurt your score. But there is much more than that factored into your score too. How much debt do you have, how long have you had credit, how many accounts do you have. Do you have different types of credit; say a car loan, home loan, and a few credit cards. Or do you just have credit cards?

Next, understand a lot of the credit score isn't about you personally, but also about the population in general. If similar people with similar profiles tend to do similar things. You probably will too. For example, those who carry high average balances on credit cards tend to default at a much higher rate. Even if you've never been late on your credit cards, if you are carry high balances, it is assumed you will likely default, and you are given a lower credit score.

What credit score do I need for a home loan?

Credit Score Grade

Generally speaking, in today's mortgage world, if your middle credit score is below 620, you are going to have a very difficult time obtaining a home loan. The further below 620, the harder it will be. If you are below a 580 credit score, it is almost impossible to qualify for home loan financing no matter what anyone tells you, or what you read on the internet. While many lenders and loan programs appear to take lower credit scores, understand that credit score alone does not get you approved. With scores that low, you usually have plenty of other things on your credit report that will get you denied regardless of score, like recent late payments, foreclosures, etc

Credit score alone does NOT equal a loan approval

With a score below 580, your odds are very slim, and most people really should save themselves the hassle. Stop attempting to find mortgage loans, and work on improving your scores instead. Once you have achieved a 620 or higher score, you should be in much better shape.

If you are denied by a one lender, contacting 10 more probably won't help.

SHOULD I BOTHER APPLYING?

If your credit scores are ABOVE 620, absolutely, APPLY NOW.

If your credit scores are in the 580 - 620 range, you have a 50/50 chance. It is probably worth reviewing your full application, so go ahead and APPLY NOW.

If you believe your credit scores are below 580, I would suggest you call us at (651) 552-3681 first to discuss your situation, as approval may be possible, but unlikely.

If you have MAJOR negative credit events, like bankruptcy and foreclosures, review the mandatory waiting periods below before applying.

CREDIT PROBLEMS & ANSWERS

Late Payments

If your credit has multiple RECENT 30, 60, or 90-day late payments, you probably won't qualify. Especially if those late payments occurred LESS THAN than two years ago. Lenders want a clean recent payment history.

Collections, Judgements, and Tax Liens

If your credit history indicates unpaid collection accounts, most "A" grade loan lenders will require these amounts to be paid off before the loan is funded. FHA typically will ignore them if they are under $2000, and more than 2 years old. Medical collection "usually" are ignored. Judgments' (you got taken to court & lost), are always REQUIRED to be paid off before you can get a mortgage loan.

Bankruptcy

If your bankruptcy is more than 2-year old, you can usually be approved for an FHA loan with as little as 3.5% down.

If your chapter 7 bankruptcy is older that 4-years, and you have good re-established credit, you may now qualify for an standard conforming loan.

If your chapter 13 bankruptcy is 2-years after discharge date and you have good re-established credit, you may now qualify for an standard conforming loan.

If your chapter 7 bankruptcy is 2-years after discharge date and you have good re-established credit, you may now qualify for a VA loan.

If your chapter 13 bankruptcy has at least 1-year of on time payments, you may now qualify for a VA loan.

If your chapter 7 bankruptcy is 3-years after discharge date and you have good re-established credit, you may now qualify for a USDA Rural Development Loan.

If your chapter 13 bankruptcy has at least 1-year of on time payments, you may now qualify for a USDA Rural Development Loan.

Foreclosure

If your foreclosure Sheriff Sale Date is OVER 7-years old, you may qualify for a standard conventional loan.

If your foreclosure Sheriff Sale Date is OVER 3-years old, you may qualify for an FHA loan with as little as 3.5% down payment.

If your foreclosure Sheriff Sale Date is OVER 2-years old, you may qualify for a VA Loan with Zero Down Payment.

If your foreclosure Sheriff Sale Date is OVER 3-years old, you may qualify for a USDA Rural Development loan with Zero Down Payment.

Short-Sale or Deed in Lieu

If your short-sale date is more than 4-years old, you may qualify for a conventional loan

NO waiting period after a foreclosure for an FHA Loan if you had NO late payments on ANY mortgage or consumer debt in the 12-months proceeding the short-sale AND it was NOT a strategic short sale.

If your short-sale date is more than 3-years old, you may qualify for an FHA Loan loan

If your short-sale date is more than 2-years old, you may qualify for a VA Loan with zero down payment

If your short-sale date is more than 3-years old, you may qualify for a USDA Rural Development loan with zero down payment

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(651) 552-3681

Cambria Mortgage - St Paul Office
33 Wentworth Ave E, Suite 290
St Paul, MN 55118
Office (651) 552-3681
Fax (651) 994-6425
E-Mail: joe.metzler@cambriamortgage.com

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FHA, VA, and USDA Approved Lender
We are an Approved Lending Institution for FHA, VA, and USDA Government Loans. While we are an approved lender, we are not part of HUD, FHA, the Veterans Administration or the United States Department of Agriculture. We are not acting on behalf of, or under the direction of HUD/FHA, VA, USDA, or the Federal Government in any way. FHA and VA do not lend directly to the public, only through approved lending institutions like Cambria Mortgage.

License Information
Cambria Mortgage. Nationwide Mortgage Licensing System and Registry (NMLS) # 322798 Saint Paul Branch - NMLS # 387944. Joe Metzler, Licensed Mortgage Loan Originator NMLS # 274132. Lending in MN, WI, IA, ND, SD, FL only.