Relating to mortgage financing, not all mortgage applications deal with credit score challenges the identical means. One space the place that is very true is how judgments are dealt with. We’re breaking down the principles for Standard vs. FHA loans when a borrower has excellent judgments.
Standard Loans: Strict Necessities
For Standard financing, the principles are clear and absolute:
All judgments should be paid in full previous to or at closing.No exceptions are allowed.
This implies if a borrower has an impressive judgment, they need to resolve it completely earlier than they will shut on a Standard mortgage.
FHA Loans: Extra Versatile Method
FHA presents a extra versatile path for debtors with judgments, supplied sure situations are met:
The borrower should enter right into a documented cost plan with the creditor.No less than three months of consecutive funds should be made earlier than the time limit.Pre-paying the three months prematurely doesn’t depend; FHA requires an precise cost historical past over time.
Contact MortgageDepot, and we’ll join you with a mortgage officer to debate your financing choices.
