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