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Answers (5)
- Justin Kennedy
- Contributions:692
this is judgement call for the underwirter.
FHA does not require the debt to cured, however, each lender has thier own overlays. the concern comes into effect that if the account was called due would that effect your abilty to repay the loan. my advice would be have your lender speak with the underwirter directly ( not the bank rep or inside person, the underwirter directly, about the account and balance. you may need need compensation factors, 3+ months reserves, timely credit since event, average or low debt to income and/or housing ratios.
- Marvin Hernandez, "Marvinloans"
- Contributions:20
Yes, on FHA loans old charge off's and collections are acceptable without having to be paid.
Good luck
- Wayne Brown, "SDMortgagefinder"
- Contributions:1433
Usually, it is the underwriter call to make that decision. The amount has a good bearing on this.
Good Luck.
Good Luck.
- Gary Kinberg, "Gary Kinberg"
- Contributions:229
Apply for a loan and submit a letterof explanation regarding the charge-off. It is the underwriters discretion to require this to be paid or not. You can get a full underwriting approval and get any underwriting conditions resolved prior to contracting on a ouse. You will get a maximum pruchase price from your lender and will need only the inspections, appraisal and title work for your purchase. good luck.
- Mike Politzer, "Mike Politzer"
- Contributions:630
If the chargeoff shows a balance due, then it's likely you'll be required to pay it off. The amount of the balance will have some impact with the underwriter. How much? It's possible that if the amount isn't too high, the underwriter could make it a condition of the close, meaning you would pay it off at the end of the transaction through escrow. If that were the case there shouldn't be any impact to the transaction even if the scores were to go down because of it, which I'm not sure would happen in any case, because the transaction would already be done.
Can I qualify for a FHA mortgage with an old unpaid chargeoff on my credit report?
My reports have been clean since that time. I now have a score of ~700 from each bureau and enough down payment and reserves for a FHA loan.
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