Contrary to popular belief, a borrower in collections isn’t automatically refused a mortgage. Collections hurts your credit score overall, and that lowered score may affect your loan prospects. However, if you have a strong credit report (over 720, usually), even with a collections case, your chances of getting a loan are still good. However, it is still a red flag. Many lenders will request an explanation and proof of a repayment plan and/or require the debt to be settled prior to or at closing.
IMMIGRATION STATUS
A person living in America who is not a permanent resident can still get a mortgage. However, if they don’t have Permanent Resident Status (colloquially known as a green card), they will have to jump through a lot more hoops to get a loan. There’s a lot more paperwork and it’s a heavier workload for both the borrower and the lender. The underwriting department will look very closely into anyone trying to get a mortgage who is not a legal resident of the country. Exceptions are made all the time, but the general idea is that if you’re not a legal resident of the country, the rest of your application will have to pass intense scrutiny to get the loan. Hughes Lending Solutions can help non-citizens obtain a home, even Foreign Nationals.
RED FLAG SYNOPSIS
This chapter went over the most common red flags lenders come across when going through the loan process. However, there are many, many more than I could list here. The important thing to know is that if you have any of these red flags, your chances of getting a loan go down. The more red flags, the lower the chances.
You likely won’t know if you have most of these red flags, but
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