Can you get a Mortgage with an Eviction – The Details

Yes, in most case you can get a mortgage with eviction but your credit score also need to be in the higher range. Usually, an eviction doesn’t always appear on your mortgage credit reports. Moreover, if your mortgage application meets all the requirements then the lender might approve the loan.

Key Takeaways

• Usually, an eviction appears when the renter doesn’t pay the rent
• Before filing an eviction, the landlord has to give written notice to tenants and try to mutually solve the problem
• It is not mandatory to include the eviction report on your mortgage application
• Usually, lenders don’t verify the rent when you apply for a mortgage

What is an Eviction?

An eviction is a type of court order that allows the landlord to remove a tenant from the property. According to the laws of the jurisdiction, eviction is also known as an unlawful detainer, summary possession, summary dispossess, summary process, forcible detainer, ejectment, repossession, etc. Usually, an eviction appears when the renter doesn’t pay the rent. In the USA, an eviction is governed by individual states and certain municipalities. When a landlord file an eviction, he needs to inform tenants that they are being evicted. Here, the landlord has to specify the reason behind the eviction.

Common Reasons for an Eviction

There are many reasons you might be evicted by your landlord. Some common reasons are –

• If you fail to pay the rent for successive months
• Continuous late payments of the rent
• Too many people live in the house
• If you use a business property as a residence
• If you sub-rent the place to another tenant without permission
• If you do anything that inconveniences other tenants
• If you refuse a logical legal change to your rent agreement
• If you damage the property that you have rented
• If you use the property for illegal purposes

How does an Eviction Work?

In most states of the USA, the rules and working process of eviction are quite similar. Before filing an eviction, the landlord has to give written notice to tenants and ask them to solve the problem that is causing the conflict. If the tenants don’t solve the problem then the landlord can file an eviction and ask the tenants to leave the rental. In some states, it only requires two/three days before the eviction process will begin.

Moreover, every state has its own law on how many notices the landlord has to give before the beginning of the eviction process. Therefore, you should contact your state authority to know all the details of the eviction process. For example, in almost all states in the USA, if you are renting month-to-month then the landlord has to give one month’s notice before the eviction process will start.

Can You Qualify For A Mortgage With A Recent Eviction?

The answer to this question depends on quite a few things. First of all, it depends on the lender. You should keep in mind that the lending requirements for FHA, VA, USDA, and Conventional loans are not the same for all lenders and they can vary from lender to lender. So, if you don’t qualify at one lender then it doesn’t mean that you won’t qualify for others. When you apply for a mortgage, the lender checks your application to see if it meets all the requirements. Some lenders might check if there is an eviction on your report but most will ignore it.

You should keep in mind that it is not mandatory to include the eviction report on your mortgage application. Moreover, verification of rent is not required for borrowers if he gets approved/eligible per the automated underwriting system (AUS). If you are applying for a new mortgage then it is mandatory to show that you have timely housing payments in the past 12 months. Here, the housing payment can be 12 months timely home mortgage or rental payment.

When Verification of Rent Required By Lenders?

Usually, lenders don’t verify the rent when you apply for a mortgage. However, there are some exceptions and in some special circumstances, a lender might want to verify the rent. Below are some common occasions/reasons when verification of rent is required –

• For manual underwriting of VA and/or FHA loans
• If a receipt from the landlord is not sufficient on VOR
• If the landlord doesn’t sign the rent form provided by the lender
• If you don’t qualify for the automated underwriting system (AUS)
• If there is any eviction tradeline on your credit report

However, you should keep in mind that manual underwriting is only allowed on FHA and VA loans, and in most cases, it totally depends on the lender. If you can provide at least 12 months of bank statement that shows the rent payment, then verification of rent is not required.

FAQs about Can you Get a Mortgage with an Eviction

What happens when you get an eviction notice?

If your landlord evicted you then you will receive an eviction notice from a law enforcement official, in most cases it is someone from your local Sheriff’s office. When you receive an eviction notice, you will be able to know the reason why your landlord has sued you. If you receive an eviction notice then you have to go to court for a hearing. If you don’t go to court to defend yourself then the landlord will win by a default judgment. In this type of situation, you will be held responsible for the consequences of the eviction like potentially back rent, court fees, and many more.

Does an eviction impact your future housing prospects?

Well, an eviction can impact your future housing prospects. In most cases, a lender checks the credit reports of prospective tenants. So, if your credit report shows debts owed through civil judgments because of an eviction then it will raise a red flag on your application. It will raise a question in the lender’s mind about your ability to pay the debt on time. Therefore, you might face trouble getting approved for a mortgage.

Do bankruptcies clear evictions?

No, bankruptcy won’t clear your eviction from the record. You should keep in mind that bankruptcies don’t remove any previous negative information from your credit report.

How can I check if I have evictions?

You should check the “public section” of your credit report to find out if you have any evictions. Moreover, evictions will also appear if you perform a rental history background check. There are many websites available where you can check your rental history for a small fee.

Can an eviction be reversed?

Yes, it is possible to reverse an eviction. When you receive an eviction, you can talk with your landlord to find a mutual solution and resolve the problem. Moreover, the best option is to always remain alert to the rules and regulations and don’t break them. Apart from that, you should always pay your rent in time to avoid evictions. However, if the eviction goes to court then you have the chance to defend yourself. However, the best solution for you is to negotiate with your landlord and keep the eviction out of your credit report.

How does eviction affect your credit score?

Eviction doesn’t directly affect your credit score but it might have a negative impact on your mortgage application. Usually, a landlord doesn’t report the late payments to the credit bureaus so the chances of eviction affecting your credit score are very low.     

How long does an eviction stay on your record in Massachusetts?

If you live in Massachusetts, then eviction will remain seven years on your record. In fact, it will remain a part of your rental history for seven years!

How can I stop eviction after a court order?

There is only one way to stop eviction after a court order and that is to solve the problem with the landlord. If you owe rent to your landlord then you can easily stop the eviction by paying all the remaining dues to your landlord.

References:

https://www.experian.com/blogs/ask-experian/can-a-broken-lease-affect-buying-a-house/
https://unionhall.aflcio.org/atlclc/covid-19-resources-round-2/housing-evictions-foreclosures-mortgages

Last Updated on November 3, 2022 by Magalie D.