Bad Credit Home Loans in Colorado and Denver

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Bad Credit Home Loans in Colorado

If you’re looking for a bad credit home loans in Colorado this article will be helpful for you. You will learn what are minimum fico score in Colorado to purchase a house with FHA or Va loan. There 3 different types of lenders on a mortgage market right now. Some of them have mortgage overlays.

The “Centennial State” is the 38th state to join the union in 1876. Colorado is home to a varied topography from sprawling mesas to one of the highest peaks in the continental United States. Covering more than 100,000 square miles and with a population topping 5 million, Colorado is an outdoor lover’s dream with some of the best skiing in the country as well as fishing, hiking and exploring. Colorado is surrounded by Kansas to the east, New Mexico to the south, Utah on the western edge and Wyoming and Nebraska to the north.

What are Bad Credit Home Loans in Colorado

Amateur explorers and archeologists alike visit Mesa Verde National Park which is home to more than 4,000 individual archeological sites and more than 600 cliff dwellings. These dwelling were occupied by ancient Puebloans who lived there from around 550 AD to the year 1300. Today, visitors can visit these dwellings up close but cannot enter the dwellings without special permission from the National Parks and Wildlife Foundation. Pikes Peak is probably the most well-known of mountain in the Rocky Mountain Range as hordes of fortune seekers flocked to the mountain when gold was discovered there in the 1800s.

The rich resources and breathtaking beauty has always been a draw for both tourists and permanent residents alike, making for a rather healthy real estate market. Colorado real estate is always in demand and the forecast for real estate in 2018 looks promising. Denver for example is considered in the Top 10 nationally for real estate in terms of housing demand and the “days on market” looks to favor sellers well into this year.

Financing for real estate in Colorado is readily available and even though conventional lending tightened up in the late 2000s lenders have recently relaxed their credit guidelines for many and today it’s not impossible to finance a purchase for a home loan even though an applicant struggles with bad credit home loans in Colorado . This may not be apparent or even newsworthy but potential homeowners shouldn’t prejudge their own financial and credit condition without first speaking with an experienced loan officer with a direct lender, such as USA Mortgage. What does the term “direct lender” mean?

Direct Lender

A direct lender is the entity that makes the final lending decision when a loan application is submitted. Other mortgage companies may indeed originate an individual loan file and issue a prequalification letter but must forward the loan application to the ultimate lender for a final underwrite. This is especially important when a lender reviews a loan application that may have some negative marks in the package but can decide independently if the entire application merits an approval.

Bad credit home loans in Colorado today essentially means depressed credit scores. When a lender orders a credit report the lender also requests credit scores. The report lists line item by line item each individual credit line along with a history of the account. The account will list when credit was first issued, the current balance, highest historical balance and the minimum monthly payment required. If there are any payments made more than 30, 60 or 90 days past the due date it will be listed as well as how many such late payments were made. The report will also list older accounts that have been closed with no activity. If an account is negative the creditor determines there is no likelihood of being paid back the account will be placed in collection and listed as such. Public records will also be listed such as judgments or bankruptcy filings.

Minimum Scredit Score in Colorado

Credit scores on the other hand assign a numerical value to the listed credit history. The scores will range from 300 to 850 with the highest score representing better credit. But it cannot be stressed more that consumers should let a lender make the determination whether or not someone can or cannot qualify based upon a credit history or credit score.

For example, the FHA home loan program accepts qualifying credit scores as low as 580. USDA loans ask for a minimum score to be at least 640 and while the VA does not specify a required minimum down payment but most lenders ask for a minimum 620 and some as low as 580. Conventional loans ask for a minimum score of 620 in most cases.

For borrowers looking for a Bad Credit Home Loans in Colorado that fall in these ranges they can help with their approval with what lenders refer to as “compensating factors.” A compensating factor in a loan file is something positive that offsets something negative. If someone for instance has a qualifying credit score of say 570 the lender may approve the loan if the borrowers can come in with more down payment. For instance, with an FHA loan the minimum down payment is 3.5 percent of the sales price but if the borrowers come to the closing table with say 10 percent down, the loan may still be eligible for an FHA approval with scores as low as 500. Note, this isn’t an automatic but still a judgement call by the lender.

Financing in Colorado

Other compensating factors besides more down payment can be low debt to income ratios, being at the same job for a number of years, good savings history and a retirement fund can also go a long way toward a final approval for someone with damaged credit. The point is that when someone with Bad Credit Home Loans in Colorado wants to buy and finance a home in Colorado, an experienced loan officer with a direct lender can often help show the way to home ownership.

If you have been turned down for a home loan or have any questions about real estate or mortgage please contact the author.

Matthew Herbolich
Matthew Herbolich
Mr. Herbolich is a Senior Loan Officer at USA Mortgage, #NMLS 227262. He is an expert not only in lending but multiple facets of real estate, particularly the title industry. Matt trains his fellow loan officers on title industry topics, real estate investing, and countless mortgage guidelines. Have any questions? Call at 888-900-1020 or send email to: mherbolich@usa-mortgage.com

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