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HUD Guidelines on JUDGMENTS for FHA LOANS
What happens if you have a older civil judgment that is not paid. Can you qualify for any mortgage loan application for a home loan approval if the judgment is not paid. I heard HUD guidelines on FHA loans is the easiest to qualify for borrowers with a judgment.
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1 Reply
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You can qualify for an FHA loan with outstanding judgments if you pay the judgment off either before or at closing. Have a written payment agreement with the judgment creditor. Or get proof that the judgment has been settled or the statute of limitations has passed. Getting approved for an FHA loan with outstanding judgments can be challenging, as FHA lenders typically have strict requirements regarding a borrower’s credit history. Outstanding judgments can negatively impact your credit score and may raise concerns for lenders about your ability to repay the loan. However, it’s not impossible to get approved for an FHA loan with outstanding judgments.
Here are a few things to consider:
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Credit Score: FHA loans generally have more lenient credit score requirements compared to conventional loans. However, having outstanding judgments on your credit report may still affect your credit score significantly. It’s essential to know your credit score and work on improving it if possible.
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Judgment Status: The status of the outstanding judgments matters. If the judgments are satisfied or paid off, it may improve your chances of getting approved. Some lenders may require you to pay off the judgments before approving your FHA loan application.
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Compensating Factors: If you have compensating factors such as a stable income, low debt-to-income ratio, or significant savings, it could improve your chances of getting approved despite the outstanding judgments.
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Lender’s Discretion: Ultimately, the decision to approve your FHA loan application with outstanding judgments rests with the lender. Some lenders may be more flexible than others, so it’s worth shopping around and discussing your situation with different lenders.
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Explanation: Providing a detailed explanation of the circumstances surrounding the outstanding judgments may also help your case. If there were extenuating circumstances beyond your control that led to the judgments, be sure to communicate this to the lender.
It’s important to consult with a mortgage lender or broker who is experienced in FHA loans to understand your specific situation better and explore your options. They can provide personalized guidance based on your financial circumstances and help you navigate the FHA loan approval process.
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