In relation to mortgage financing, not all mortgage applications deal with credit score challenges the identical method. 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 need to resolve it totally earlier than they’ll shut on a Standard mortgage.
FHA Loans: Extra Versatile Strategy
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.At the very least three months of consecutive funds have to be made earlier than the cut-off date.Pre-paying the three months upfront 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.
