Mortgage lenders establish minimum credit scores as part of their program guidelines. If an applicant has a credit score lower than what is required, that will usually mean the loan request will be denied, regardless of how strong the rest of the application is.
These credit guidelines also establish rules for how many years a borrower must wait to apply since major credit derogatory events like a bankruptcy, foreclosure or short sale.
Credit scores range from 300-900 with 300 being the worst. During the mortgage crises, minimum credit score requirements on new loans were very high, often above 700. In recent years, new programs have allowed lower scores.
Today, we have loan programs that will allow scores as low as 580. Conventional loans require a higher score to qualify, usually 620 or higher. Jumbo loans require even higher scores, often 700 or higher.
Major Credit Events
A borrower may need to wait four or more years since a previous bankruptcy, foreclosure or short sale to be eligible for new financing. Each lender has their own guidelines so some will allow a shorter "wait time".
Our new Flexible Loan Program has expanded guidelines that allow only one year to pass since one of these major credit events before becoming eligible for a new loan.
Recent program changes now allow borrowers with lower credit scores and recent credit events (1 yr. or more) to become eligible for new mortgage financing.
Posted by: Brian Bush
Brian and his team have been funding real estate loans for over 25 years.
Since 1991, they have funded over 1.5 Billion Dollars in loans.
You can reach Brian at 800-607-1941 x220 or email@example.com .