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Lindsey Peterson avatar

by Lindsey Peterson / Sep 21, 2018

Is it possible to get a mortgage with late monthly payments?

The answer is yes, BUT there are some contingencies.

What are maximum lates?

This is the maximum amount of late payments a mortgage can have and still be eligible for financing.

​What must be viewed?

Conventional, USDA and VA

  • All mortgage liens in the client's name must be reviewed and meet maximum late guidelines.
  • Payment history of reverse mortgages is not required.
  • Conventional only: Partial mortgage payments are not considered "full payments" and should be viewed as late payments, regardless of how they are reflected on credit reports. 

Jumbo and FHA

  • All mortgage liens in the client's name must be reviewed and meet maximum late guidelines.
  • Payment history of reverse mortgages is not required.
  • Lates on any rent payments or real estate debt in the client's name or on the subject property, even if the property is not yet in the client's name, count toward the specific product limit for the maximum lates allowed.

Mortgage Housing History

Conventional, USDA and VA

  • Mortgage History: Approve/Eligible and Refer/Eligible:
  • Reporting on credit: Not required
  • Not reporting on credit: Previous 12 month history required

Jumbo

  • 12 month housing history required

FHA

  • A 12 month housing history must be verified if required by rocket findings

Mortgage Payment History

Conventional

  • Max 0x60 in 12 months prior to credit report date.
  • Clients may not bring the mortgage current prior to closing to qualify IF they are more than 60 days late.

VA

Approve/Eligible (excluding VA Jumbo):

  • Reporting: Max 1x30 in 12 months prior to credit report date.

VA Jumbo:

  • Max 1x30 in 12 months prior to credit report date

Jumbo

Reporting: Max 0x30 in 12 months prior to credit report date

Not Reporting:

  • Max 0x30 in 12 months prior to credit report date
  • Obtain ONE of the following:
  • Credit Supplement
  • VOM
  • VOR
  • 12 months

FHA

Purchase and Rate/Term Approve/Eligible:

  • Late payments may not exceed ONE of the following:
  • Max 2x30 in 12 months prior to application
  • Max 1x60 in 12 months prior to application
  • Once a case number is assigned, seasoning is measured from the case number assignment date. 

Cash out Approve/Eligible

  • Max 0x30 in 12 months prior to application
  • Properties mortgaged less than 12 months but more than 6 months from application date are allowed provided:
  • The mortgage payment history shows max 0x30 for the number of months it has been paid


120 Day Mortgage Lates

VA

A 120 day mortgage late will be permitted in the prior 3 years from application date if the following requirements are met:

  • Evidence the loan has been brought current.
  • A current up-to-date mortgage history is needed.
  • Prove that the problem that caused the late(s) has been corrected.

Jumbo

  • Not allowed within the last 7 years

FHA

A 120 day mortgage late will be permitted in the prior 3 years from the application date if the following requirements are met:

  • Evidence the loan has been brought current. A current up-to-date mortgage history is needed 
  • Prove that the problem that caused the late(s) has been corrected.

Be Prepared

Take a look at our checklist to see the basic documents you’ll need to apply.