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Bad Credit Mortgage Loans Now Get Qualified in California with No Lender Overlays

California Bad Credit Mortgage Loans Blog:  Updated by Bill Burg Nov 9, 2017

We can all faintly remember when California and the rest of American was devastated by the Great Recession of 2008. This also affecting many of the property values throughout our entire region. Time past, but it still affects us financially.

  • Before that time, home values were still appreciating by double digits.  Suddenly home prices began to plummet, and a large group of homeowners found themselves with mortgage balances much higher than what their homes were worth.
  • Short Sales and a Record number of foreclosures left many families in financial ruin with bankruptcies, foreclosures financial problems.
  • Today, California housing prices are recovering, and you are now in one of the hottest states in which most areas, there is a shortage of homes for sale and an ever-growing demand of by new home buyers.
  • Even better news, families who may have lost home ownership way back in the 2008 to 2012 recession have likely have skated past their minimum waiting periods after foreclosure and bankruptcy.  To some it people, many Californians may now finally qualify for a home loan
  • Even better news, many potential home buyers may now qualify for New Bad Credit Mortgage Loans and/or may have an option to qualifying for other new specialized home loans.
  •  One other bit of new, man other potential home buyers have delayed buying a house, with the thought that they did not have a possibility of buying a home.  Yes, they can now, FINALLY begin look at home ownership and the California Dream.
  • Today, there are many new changes in mortgage lending, home buyers may now qualify for California Mortgage Loans again. Hurray!


Importance of Credit: Credit Repair to Make Your Loan “Mortgage Ready”

As Americans live our lives and supplement or lifestyles with the aid of credit. Good or Bad, Credit affects almost all Americans in different ways.  So, your question is: how to clean up credit to buy a home.

  • The single most important purchase, is our homes.  The second is usually that we finance or lease our vehicles, now if you listened to our parents, you went to school and you most likely have, student loans and student related debt.  We also have installment loans, personal loans, business loans, and in you dig in your wallet or purse a few credit cards.
  • Whether we pay our installments payments on time, is one of the factors on how we are “scored” by the Big Three credit bureaus.  How you will pay now is the best indicator to them how we will pay on a future loan. 
  • If you are planning on applying soon or have had some problems in the past, get some simple advice by an experienced Mortgage Loan Officer.  It  is always helpful in getting your application Mortgage ready or if you need, to reapply with another loan option.
  • During the 2008 Real Estate and Credit Collapse, many people just stopped paying on credit cards and continued simply paid everything with cash (or funds already in your account with a debit card) “If you don’t use it you lose it” is the best way to describe what eventually happens. Some people think that if you are using a debit card, it will help your credit.  Think again, you are only taking out of your checking or savings account.
  • To summarize this story, that is a primary reason many consumers have low credit scores.  The simple lack of activity on their credit accounts, especially revolving accounts causes credit scores to decline.  
  • An important note: when reestablishing credit, use only to a certain amount of the maximum limit, if use them at 10 to 30 % of the total limit, you will maximize the points you will get added to credit score. If you want your mortgage credit repair to go each and every month, that is one of the biggest secrets from the insiders.
  • Many consumers can have credit scores in the 500’s, then ask me how to improve credit score 100 points, simply, get out the old credit accounts, get a few secured ones and re-established your credit history.


How to Improve Your Credit Score Immediately: Credit Scores Versus Credit History:

When a  Mortgage Loan Officer reviews your credit history he looks at two things.  Current credit scores and all recent history that stands out on the credit report, those two factors are:

  • The last 12 Months on your credit history and if the payments are on time.
  • Any Late Payments in the months after any recent Bankruptcy, Foreclosures, Deed In Lieu Of Foreclosure or a Short Sale.  How you bounced back and from what happened later after the dust settled.


A Look at Your Credit History: How Underwriters Utilize Guidelines and Process Loans

When consumers activate credit, the massive big three credit reporting agencies take what information is given and take that data to calculate overtime your credit score.  As we all know, that score is how lenders determine what interest rates are added to the money you borrow.  If it is too low, it may determine  whether you are even denied or granted credit.

  • So, now you are thinking to yourself, how many months does it take to improve credit score. I know it seems important now, but many months is not as important, as your effort to improve, keep it maintained and continue the positive direction.
  • Underwriters use only pre-set guidelines when they are determining your financial future. I know you scratching your head and saying, I do everything else in my life wonderfully, but I am not very good at keeping consisitant.  In the banking world, it is not personal, you are simply a number.  Use those lessons to your advantage!
  • The single most important factor is your middle credit score, when granting you a mortgage loan. So, get active and  continue improving your scores
  • Secondly,  income, debts (your Debt-to-Income ratio or DTI) and your current assets all are factored in determining your ability to buy a home. Some things you may even have forgotten about are assets,  Some good examples are Bonds, 401Ks and long term investments.
  • When you first meet with a lender, Credit scores first deciding factor, if they are even going to proceed with the credit approval process. If they kindly say sorry and show you the door, do not fret.  Working with an experienced Mortgage Loan officer can help guide you in a positive direction so you can get home loan approval.  Many banks, just want to pick the top fruit of loans and do not want to invest the time as soon as they see your credit scores are not at the top level of customers.
  • Now, the Big Secret, most banks artificially raise the minimum requirements in which you can be accepted.  This does sound fair, it is not! That is what is quietly called added Bank Overlays.  How many of you have even heard of bank overlays, unless you are in the banking business or a well informed real estate agent.  That means, you might get Old Rejection with one bank and go to an experienced loan officer with no Bank Overlays and get the mortgage.  Nothing changed with you, just you decided on another bank.


Minimum Credit Scores to Qualify for a California Bad Credit Mortgage Loans: How to Find a Credit Repair Mortgage Lender and All Types of Home Loans

The Bill Burg Team are all experienced specialists in getting California home buyers qualified for California Bad Credit Mortgage Loans as well as many other types of Home Loans

  • We at the Bill Burg Team are experienced and licensed to do business in multiple states. A large percentage of our borrowers are California home buyers and California homeowners.
  • Also for California home owners, we offer refinancing with no closing costs.
  • Our Mortgage Loan Officers at The Bill Burg Team have both a five-star national reputation in servicing our customers and goal to close most loans in 21 days or less. Our primary business model is based on no overlays for Government insured loans and Conventional Loans.
  • The Bill Burg Team has a reputation both regionally and nationally as being one of the most aggressive California Bad Credit Mortgage Professionals and strive daily to get more home owners approved.

Minimum credit score requirements for home loans are:

  • A minimum 580 FICO Credit Score, to qualify for a 3.5% down payment FHA Loan.  These also do no contain lender overlays.
  • To say Thank You for you service., No overlays on VA Loans.
  • Conventional Loans must have a minimum 620 FICO Score, if you are close, some simple credit repair might do the trick.
  • Minimum requirement for a USDA Loans have a 580 FICO Score.


Lenders Risk Level Evaluations and Credit Scores

  • Credit Score of 760 to 850 is the highest and is classified as an excellent credit rating.
  • Credit Score of 700 to 759 is classified as a great credit rating and also in the top tier.
  • Credit Score of 660 to 699 is classified as a good credit rating, keep up the good work.
  • Credit Score of 580 to 659 is classified as a fair credit rating, varies what type of loan.
  • Credit Score below 580 is classified as a poor credit rating, only one way to go, up!


How Lenders Treat Borrowers with High Credit Scores

If you at the top and have an excellent credit scores, you can count on qualifying for any type of credit you apply,  if you also satisfy the income and DTI requirements.  Don’t forget you are still subject to hidden bank overlays and costs.

  • Typically you should have your choice on  getting approved for credit cards, auto loans, and mortgages.  I have to be the bear of bad news,  but with Bank Overlays, you may still be paying too much for your California home loan.
  • The two tiers are sometimes combined as a premium borrower.  They have a credit score above 740 FICO and as a “premium” credit borrower and should be much easier to get approval.  As the majority of us have had a few ups and downs in our history, it is quite normal  if you are not in that category.


California Bad Credit Mortgage Loans: Borrowers with a 620 or Lower FICO Credit

You find out your Credit scores is below 620 FICO, most lenders will look at you as being either too risky or viewed as less than favorable.  To compensate, they will insist on a higher interest rate or many cases they will choose not to work with you at all.

  • Here at the Bill Burg Team we not only assist in helping borrowers with under 620 FICO credit scores, we specialize in it.
  • If you are a borrower with credit scores in the 580 to 619 range and are needing advice or tired on hearing rejection: do not hesitate to contact The Bill Burg Team.
  • A large number of our borrowers have a 600 credit scores or less. We want to tell you, Yes!
  • The minimum FHA requirement is 580 FICO for a 3.5% down payment FHA home loan, but as read before, the mast majority of lenders require a higher credit score due to their added  lender overlays.  You potential Yes, suddenly became a No!, Yikes.
  • FHA Lender Overlays are simply, not required, but ADDITIONAL Mortgage guidelines that an individual mortgage lender implements.  These are NOT FHA minimum Guidelines.  Most banks fit into this category.
  • It varies though out the year, but around 75%-80% of our customers have recently been denied for a mortgage loan.  In many cases they were happily pre-approved and were later declined.  The only results were stress on you about the mortgage process, we try to reduce that stress.


 How to Improve Credit Score Immediately: Bad Credit Score Can Be Improved!

Credit scores can be improved and if somehow your credit is recently damaged by a few late pays, being, your credit score will gradually improve over time. Here is some tips.

  • Fact, it is like a bad hangover, except no one at the bar bought the next round.
  • Once you have a consistant pay on a vehicle payment, for example, your credit scores will most likely will quickly drop around 50 to 100 points. 
  • The good news, if pay your car payment on time for the next year, you will probably see a month by month increase and most of the points, you will regain to your good credit statis.


What Determines Credit Scores:  and What Counts the Most

  • 35% Is your current on-time payment History
  • 30% is your outstanding balance on active debts, not on dormant accounts.
  • 15% of your score is determined by  overall length of each credit history.  New accounts, do not count as much as older, more stable ones.
  • 10% Types of credit accounts and credit cards, what do mean,  you are judged on what type of credit accounts you have. Yes, the factor it that too.  If you buy more secure items, you looked upon differently.
  • 10% As mentioned earlier, new credit applications that you have applied for are not factored as highly as the old reliable ones.


Can You Monitor Your Credit Report: You Can and Should Do a Frequent Review

You can check your credit report and credit scores just like you monitor your bank account statement. You might be surprised at that information might not be yours or is so outdated, it needs to be removed.

  • Bad credit results in higher interest rates on your loans, higher monthly insurance premiums insurance , and even though it shouldn’t, it can  also cause you to lose a job offer or potential promotion.
  • Most employers today run both a credit and background checks on a potential employee and/or current employees who are up for a promotion. It just doesn’t seem fair, but it happens.


How to Obtain a California Bad Credit Mortgage Loan?  The Real Secret is Where.

The Bill Burg Team offers many types of loans including:

  • Conventional, FHA. VA, USDA, ARM and 203K Rehab Loans
  • NON-QM Loans(through our lending partners) such as bank statement loans, no income verification loans, and one day out of foreclosure and/or bankruptcy mortgage loans.
  • Over 75% of our borrowers are people just like you either received a last-minute mortgage loan denial or are going through an intense level of stress during their mortgage process with their current lender because they were not properly qualified.
  • Bill Burg and The Bill Burg Team are experts in closing loans in 21 days or less and close 100% of their pre-approvals.
  • There is no reason why a pre-approved borrower cannot just close their home loan but close it on time.

We are season veterans in helping mortgage loan borrowers who have bad  to poor credit scores qualify for mortgage loans. If you want to purchase a home but need answers, contact Bill at 941-444-0010.  He can also be reached by texting Bill Burg on his cell for faster response at 941-444-0010. You can also email us at or you can see more blogs and start your application at

Bill Burg is a 3-time Author in teaching others about the Financial and Real Estate Business.  He is an experienced Senior Mortgage Loan Officer with USA Mortgage and USA Mortgage is one of the few banks that have a business model of success without Bank Overlays.  Overall, he has invested that last 13 years helping hundreds of families and investors achieve the dream of home ownership.

Bill Burg at and USA Mortgage NMLS# 1647508

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