Your Late Payment=you needing a Down Payment when Buying a Minnesota Home
This ‘hard and fast rule’ is not always 100% accurate because some buyers with only one 30+ day late that are reported on their credit in the last 12 months may still get a VA loan or their credit score may not have dipped below a 580 score for VA, so it’s possible to get qualified with the initial automatic underwriting with the quAlifying credit score.
So now that you know the, it depends, and sometimes scenarios, let me explain what this statement means.
Qualifying for the MInnesota home loan when qualifying to buy
It is not out of the question that as a buyer here is Minnesota looking for a home that 30+ day late payments for the last 12 months as it relates to lenders and credit scores could really stop you from the opportunity to buy a home.
First off, many late payments will likely lower your credit score enough to eliminate you from a 580+ credit score FHA mortgage.
It may from a 550+ USDA mortgage and will make your VA loans much tougher especially delay them as they become 60+ dAys delayed.
If you had a very high credit score and missed one mortgage payment, hypothetically you could lose 100+ points on your credit score.
That’s how important on-time payments are, or not letting it report to your credit with over 30+ days late.
So now that you know how a lower credit score is a byproduct of 30+ day late payments.
Assuming you have minimum household income of $40,000+ to afford much these days in the housing market here in Minnesota of how it’s currently priced.
Let’s get into the down payment requirements with the missed payments:
It wouldn’t be unheard of for a lender to require 20%-25% down payment with the late payments resulting also in a low enough 500+ credit score.
With that large of a down payment
$50,000 to $100,000+
I think it’s strange to not be making your payments on-time, but if you don’t have positive cash flow and you have the money from equity then you could sell your home and buy with the equity as your down payment.
Also with 10%+ down you can start looking into seller financing on a contract for deed with no banks involved.
If you do have 12 months of on-time payments and want to look into two 100% home loan programs locally here for Minnesota check these two out
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