500+Bad Credit Texas Mortgage Lenders

500+Bad Credit Texas Mortgage LendersTexas Mortgage Lenders For Bad Credit

BAD CREDIT TEXAS MORTGAGE LENDERS Archive Include:

500+ Texas Bad Credit Mortgage Lenders- The following document describes the responsibilities and requirements of the

Texas Bad Credit Mortgage Lenders  Mortgage Lending Division Underwriter

(Underwriter) when reviewing and underwriting mortgage loan applications. The

purpose of credit and property underwriting is to ensure that each loan meets high

quality standards that make the loans acceptable to Texas Bad Credit Mortgage Lenders.

Exceptions – Exceptions to published guidelines are considered on a case-by-case basis.

Loans with exception requests should exhibit strong compensating factors. All

exception requests must be submitted to the Underwriting Manager along with

any supporting documentation according to Texas Bad Credit Mortgage Lenders Exception policy.

Bad Credit Texas Mortgage Lenders Employment / Income Documentation

Documentation of income is required using Full Documentation, Bank Statement

Documentation, and 1-Year Alternative Income Documentation.

Primary Residence Texas Bad Credit Mortgage Lenders

A primary residence (or owner-occupied property) is a dwelling occupied by the

Texas Bad Credit Mortgage Applicants as his or her principle residence.

To qualify as a primary residence, the transaction must meet each of the

following criteria:

Property is located in the same general area as the Texas Bad Credit Mortgage Applicants

employment

Texas Bad Credit Mortgage Applicants intends to occupy the subject property for the majority of the

year

Property possesses physical characteristics that accommodate the

Texas Bad Credit Mortgage Applicants family

Texas Bad Credit Mortgage Applicants shall occupy the property as a principal residence within 60

days after closing and continue to occupy the property as a principal

residence for at least one year after the date of occupancy

Second Home Texas Bad Credit Mortgage Lenders

A second home is a dwelling occupied by the Texas Bad Credit Mortgage Applicants in addition to their

primary residence (may also be referred to as a vacation home). Second homesare restricted to 1-unit dwellings.

Typical second homes should meet the following criteria:

Be located a reasonable distance away from the Texas Bad Credit Mortgage Applicantsprimary

residence

Must be occupied by the Texas Bad Credit Mortgage Applicants for some portion of the year
Suitable for year-round occupancy
Texas Bad Credit Mortgage Applicants must have exclusive control over the property
Must not be subject to any timeshare arrangements, rental pools orother agreements which require the Texas Bad Credit Mortgage Applicants to rent the subject property or otherwise give control of the subject property to a management firm

 

 

Investment Property  Texas Bad Credit Mortgage Lenders

An investment property (or non-owner occupied property) is an income producing

Property that the Texas Bad Credit Mortgage Applicants does not occupy. Investment properties are permitted on the Texas Bad Credit Mortgage Lenders Flexible Advantage Plus program only. Purchase  A purchase transaction is one which allows a buyer to acquire a property from a seller. A copy of the fully executed purchase contract and all attachments or addenda is required. Assignment of the sales contract is not permitted.

The lesser of the purchase price or appraised value of the subject property is used to calculate the loan-to-value.

General Refinance Requirements

Rate/term refinance and cash-out refinance transactions are allowed.

All investment property refinances require an appraisal review product. See

Appraisal Review Process for detailed requirements.

Determining Loan-to-Value

If the subject property was acquired ˃ 12 months from application date, the

appraised value must be used to determine loan-to-value.

If the property was acquired ≤ 12 months from application date, the lesser of

the current appraisal value or previous purchase price plus documented

improvements (if any) must be used. The purchase settlement statement and

any invoices for materials/labor will be required.

Benefit to Texas Bad Credit Mortgage Applicants

In keeping with the commitment of responsible lending, all primary residence

and second home refinance transactions must have a measurable benefit to

the Texas Bad Credit Mortgage Applicants. When determining the benefit on a refinance transaction, one or more of the

following must exist to support the benefit to the Texas Bad Credit Mortgage Applicants

  • P&I reduction
  • Debt reduction
  • Uncontrolled cash-out
  • Balloon payoff
  • Title transfer
  • Property retention

State-specific and/or federal benefit to Texas Bad Credit Mortgage Applicants compliance requirements

must be adhered to. Underwriters are to complete the Texas Bad Credit Mortgage Lenders Benefit for

Texas Bad Credit Mortgage Applicants Worksheet to ensure compliance with the Texas Bad Credit Mortgage Lenders benefit to Texas Bad Credit Mortgage Applicants

policy. Files must contain documentation supporting the acceptable benefit.

Additional restrictions apply if the new loan refinances an existing loan

considered to be a special mortgage.

A special mortgage is originated, subsidized, or guaranteed by or through a

state, tribal, or local government, or nonprofit organization that either bears a

below-market interest rate at the time the loan was originated or has

nonstandard payment terms beneficial to the Texas Bad Credit Mortgage Applicants such as payments that

vary with income, are limited to a percentage of income, or where no

payments are required under specified conditions.

If the Texas Bad Credit Mortgage Applicants will lose one or more of the benefits of the special mortgage,

then both of the following apply:

Underwriter must check that the loan complies with all applicable state

and local laws as well as laws associated with the subject special loan

program for compliance; and

Underwriter must take special care to ensure a net tangible benefit to

the Texas Bad Credit Mortgage Applicants.

 

Stipulations For Texas Payoff in Less Than 12 Months

Texas Bad Credit Mortgage Lenders may refrain from making a loan if it obtains any information that indicates

that the Texas Bad Credit Mortgage Applicants may pay off the loan in fewer than 12 months, whether such

payoff is anticipated by refinance, sale of the property or otherwise.

 

Stipulations For Texas Properties Listed for Sale

To be eligible for either a rate/term or a cash-out refinance, the subject

property must be taken off the market on or before the application/submission

date. Texas Bad Credit Mortgage Applicants must also confirm in writing the reason for the prior MLS

listing and statement of intent to retain the subject property for 12 months after

Closing. For cash-out transactions, if the subject property was listed for sale in the 6

months prior to the application/submission date, a 10% LTV reduction from

the maximum available for the specific transaction is required.

The lesser of the most recent list price or the current appraised value should be

used to determine loan- to-value for both rate/term or cash-out transactions.

 

Refinances of Texas Bad Credit Mortgage Short Payoffs

Refinances of Short Payoffs are only acceptable for Texas Bad Credit Mortgage Lenders (Stanwich

Portfolio) transactions.

 

Rate / Term Texas Bad Credit Mortgage Refinance

A rate/term refinance is the refinancing of an existing mortgage for the

purpose of changing the interest and/or term of a mortgage without advancing

new money on the loan.

The mortgage amount for a rate/term refinance is limited to the sum of the

following:

Existing first mortgage payoff

Closing costs and prepaid items (interest, taxes, insurance) on the new

mortgage (Note: property taxes must be pre-paid. Payment of

delinquent property taxes is not permitted for rate/term refinances)

The amount of any subordinate mortgage liens used in their entirety to

acquire the subject property (regardless of seasoning)

The amount of a home equity line of credit in first or subordinate lien

position that was used in its entirety to acquire the subject property

(regardless of seasoning)

Any subordinate financing that was not used to purchase the subject

property provided:

o For closed end seconds, the loan is at least one year

seasoned as determined by the time between the note date of

the subordinate lien and the application date of the new

mortgage

o For HELOCs and other open-ended lines of credit, the loan is

at least one year seasoned and there have been less than

$2,000 in total draws over the past 12 months

If the most recent first mortgage transaction on the property was a cash-out

refinance within the last 6 months, the new mortgage is not eligible as a

rate/term and must proceed as a cash-out refinance. Note date to note date is

used to calculate the 6 months.

On rate/term transactions, the Texas Bad Credit Mortgage Applicants may only receive cash back in an

amount that is the lesser of 2% of the new mortgage balance or $2000.

Texas

Conversion

(Refinance)

Transactions

The state of Texas permits conversion of Texas Home Equity cash-out

transactions to rate/term refinance transactions under Tex. Const. Art. 16

50(f)(2). Refer to Refinancing an Existing Home Equity Loan – Texas

Conversion Transactions for detailed requirements to convert (refinance) a

Texas 50(a)(6) loan to a non-home equity rate/term loan.

Cash Out

Refinance

A cash-out refinance is a refinance that does not meet the rate/term refinance

definition. Cash-out would include a refinance where the Texas Bad Credit Mortgage Applicants receives

cash from the transaction or when an open-ended subordinate lien (that does

not meet the rate/term seasoning requirements) is refinanced into the new

transaction. A mortgage taken out on a property previously owned free and clear is always

considered a cash-out refinance.

The mortgage amount for a cash-out refinance transaction may include any of

the following:

Existing first mortgage payoff

Closing costs and prepaid items (interest, taxes, insurance) on the new

mortgage (Note: Payment of delinquent property taxes is permitted for

cash out refinances and must be paid with Texas Bad Credit Mortgage Applicants funds or cash out

proceeds)

The amount of any subordinate mortgage liens being paid off that do

not meet seasoning and draw history requirements as described in

Rate/Term Refinance

The amount of any non-mortgage related debt paid off through closing

Additional cash in hand reflected on the settlement statement

 

Cash-Out Letter of Explanation Required

A signed letter from the Texas Bad Credit Mortgage Applicants disclosing the purpose of the cash-out must

be obtained on all cash-out transactions.

The Underwriter should ensure the purpose of the cash-out is also reflected

on the loan application. The application alone is not sufficient to explain the

purpose of the cash-out.

 

Seasoning

For all cash-out refinance transactions:

At least one Texas Bad Credit Mortgage Applicants must have been on title a minimum of six (6)

months prior to the new note date, and

A minimum of six (6) months must have elapsed since the most

recent mortgage transaction (either the original purchase transaction

or subsequent refinance) on the subject property. Note date to note

date is used to calculate the six (6) months.

See also Determining Loan-to- Value for calculating LTV.

For cash-out refinance transactions where the property is currently vested in a

Trust or LLC, the Texas Bad Credit Mortgage Applicants must have owned the property in the name of the

Trust or LLC for at least six (6) months prior to closing.

Note: The six (6) months seasoning requirement may include a recent vesting

change from a Trust or LLC to the Texas Bad Credit Mortgage Applicants however, loans may not close

vested in the name of a Trust or LLC. Properties removed from a Trust/LLC

are not required to meet the seasoning requirements if the property moves

from the Trust to the owner of the Trust or the LLC to the owner of the LLC.

Minimum fifty-percent (50%) ownership of the LLC is required.

There is no waiting period if the Texas Bad Credit Mortgage Applicants was legally awarded the property

through divorce, separation, or dissolution of a domestic partnership. See also

Inherited Properties and Property Buyouts.

 

Bad Credit Texas Cash out Mortgage For Delayed Financing

Cash-out on properties purchased by the Texas Bad Credit Mortgage Applicants with cash and owned less

than 6 months is allowed. The following requirements apply:

Original transaction was an arm’s-length transaction

Settlement statement from purchase confirms no mortgage financing

used to acquire subject

Source of funds used for purchase documented (gift funds may not be

included)

New loan amount can be no more than the actual documented amount

of the Texas Bad Credit Mortgage Applicants initial investment in purchasing the property plus the

financing of closing costs, prepaid fees, and points on the new

mortgage loan

All other cash-out refinance eligibility requirements must be met Cash-Out Limits

Higher Priced Mortgage Loans

(HPML)

A higher-priced mortgage loan (HPML) is a closed-end consumer credit

transaction secured by the consumer’s principal dwelling (owner-occupied,

primary residence, 1- 4 units, 1 stor 2nd lien purchase and refinance

transactions).

Exemptions: These requirements do not apply to the following:

Second homes

Investment properties

HELOCs

The loan will be considered a HPML if the APR exceeds the average prime offer

rate (APOR) for a comparable transaction as of the date the interest rate is set

by:

1st Lien: 1.5% or more

1st Lien (Jumbo Loans): 2.5% or more

2nd Lien: 3.5% or more

 

As described above, some types of loan transactions are exempt from the

HPML requirements. Refer to the Truth in Lending Act (Regulation Z) Policy for

additional information on HPML requirements and exemptions.

Texas Bad Credit Mortgage Lenders must comply with the following requirements on all HPML:

Escrow Accounts Required

Texas Bad Credit Mortgage Lenders may not extend a higher-priced mortgage loan secured by a first lien on a

consumer’s principal dwelling unless an escrow account is established before

consummation for payment of property taxes and premiums for mortgage related

 

 

The seller acquired the property 90 or fewer days prior to the date of the

consumer’s agreement to acquire the property and the price in the

consumer’s agreement to acquire the property exceeds the seller’s

acquisition price by more than 10%, or

The seller acquired the property 91 to 180 days prior to the date of the

consumer’s agreement to acquire the property and the price in the

consumer’s agreement to acquire the property exceeds the seller’s

acquisition price by more than 20%.

The second appraisal must be obtained by a different certified or licensed

appraiser than the one who prepared the first appraisal.

 

A transaction will be considered a flip transactions when:

The seller acquired the property 90 or fewer days prior to the sales

contract date, and the new contract price exceeds the seller’s

acquisition price by more than 10 percent; or

The seller acquired the property 91 to 180 days prior to the sales

contract date, and the new contract price exceeds the seller’s

acquisition price by more than 20 percent.

The chain of title and appraisal report must be reviewed for prior sale and

transfer history. Flip transactions are subject to the following requirements:

All transactions must be arm’s length, with no identity of interest between

the buyer and property seller or other parties participating in the sales

transaction

No pattern of previous flipping activity may exist in the last 12 months.

Exceptions to ownership transfers may include sales by government

agencies, properties inherited or acquired through divorce, and sales by

the holder of a defaulted loan

The property was marketed openly and fairly, through a multiple listing

service, auction, for sale by owner offering (documented) or developer

marketing

If the property is being purchased for more than 5% above the

appraised value, a signed letter of acknowledgement from the Texas Bad Credit Mortgage Applicants

must be obtained

An additional appraisal product is required:

o Non-HPML flip transactions follow the Appraisal Review Process

o Higher Priced Mortgage Loans (HPML) require a Second Full

Appraisal. See Second Full Appraisal.

HPML New Construction Properties with any title transfer within 180

days prior to the sales contract date, or any title transfer after the sales

contract date, including land-only and zero value title transfers, require a

Second Full Appraisal. See Second Full Appraisal.

TEXAS BAD CREDIT MORTGAGE APPROVED WITH COLLECTIONS?

I Have Unpaid Collection Debt on My Credit Report. Can I Still Get a Texas Mortgage? YES!!

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