Bad Credit Florida Home Loan Options

Compensating Factors Help You Get Approved

Acceptable compensating factors that might help your approval with bad credit include the following:

1. Reserves – Verified and documented cash reserves equal to or exceeding three months of the total monthly mortgage payments.
2. Rental History – The new total monthly mortgage payment is not to exceed more than 100 or 5% higher than the previous total monthly housing payment, whichever is less, and there is a documented twelve-month housing payment history with no more than 1 x 30-day late mortgage payment.
3. Additional Income – Verified and documented additional income that is not considered effective income.

Understand Credit Score requirements.

Every Florida mortgage lender has their minimum credit score and payment history requirements. For  Conventional mortgage loans sold to Fannie Mae, minimum credit score and Freddie Mac, minimum credit score requirement, there are NO exceptions; minimum 620+ credit score with AUS or LPA automated loan approval!“If you have a lower 500 credit score, then you have some work to do.  Bad credit Florida mortgage applicants can check their credit for free once a year at

• Annualcreditreport.com – Free pull once a year.
• Experian
• Credit Karma
• Credit Sesame
  Regularly checking your credit score helps you learn about what improvements you can make.

Call All Collection Accounts!

This action, by far, will have the greatest impact on increasing your credit score, but it’s sometimes hard to achieve; either way, it’s worth a shot. Call all your collection accounts on your credit report and ask if they will accept a settlement for deletion. In the collector’s eyes, they would rather get something than nothing. And, if they agree to remove the collection, you will want to get the agreement in writing first before you pay. This will help ensure that the collection will be removed when you mail the paid receipt with the agreement with the creditor to the credit agencies.

Lower Your Debt-to-Income Ratio!

Your DTI or debt-to-income (DTI) ratio compares your monthly debt payments to your monthly income. The lower your DTI ratio, the higher your credit score, and the more appealing you are to a Florida bad credit mortgage lender. To increase your credit score before applying for a mortgage, aim to pay down as many revolving accounts as possible first because revolving accounts help to increase your score faster. And, any installment account with less than 10 months of remaining payments can be negated from your monthly Debt-to-Income Ratios.

Private Florida Mortgage Lenders For Bad Credit!

A private Florida mortgage lender might help. But Frank Dodd mortgage rules require all Florida bad credit mortgage lenders to verify your ability and willingness to repay a mortgage loan on a primary home. For a primary home purchase, even Florida loan sharks are capped by how much they can make lending to borrowers with bad credit.

Letter Of Explanation To Help Get You Approved!

Explain to the lender what happened that you could not control and why this will not happen again going into the future. You must have a good payment history after the credit event for this to work.

Does a Lower Credit Score Affect the Interest Rate?

Yes, a lower credit score will impact your interest rate. When you have a lower credit score, bad credit mortgage lenders will increase your interest rate to compensate for the higher risk.  In the same way, a higher credit score shows you a lower risk and will help you earn a better rate.  Government loans are backed by the U.S. Department of Housing and Urban Development (HUD) and provide more opportunities for borrowers with lower credit scores.

Does a Lower Credit Score Affect the Closing Costs?

Your lower credit scores will affect your closing costs because bad credit Florida mortgage lenders often charge points to help offset the increased risk.  Discount points are a way for you to qualify with a bad credit lender if your loan request is considered higher risk. If your credit score results in a higher rate, you may decide to buy discount points to lower it. Sometimes, you can finance the costs of discount points into your mortgage loan amount. Other times, you may be required to pay them to get your loan closed.

Bad Credit Florida Mortgage Locations: