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Answers (22)
- Robert Lowery, "Bob Lowery"
- Contributions:2097
Jori, you may want to take a look at the post at the top labeled
"Reminder on Zillow Advice Policy"
It also states "No Spam or self-promotion!" right next to the submit button. This is Q&A website for advice and to answer questions; not a forum to beg for business.
"Reminder on Zillow Advice Policy"
It also states "No Spam or self-promotion!" right next to the submit button. This is Q&A website for advice and to answer questions; not a forum to beg for business.
- Jori Stern, "fha600"
- Contributions:12
It sounds like you need an experienced loan officer to review your credit and help you remove disputes. We could then do a rapid rescore. PrimeLending has a minimum credit score requirement of 600 for FHA loans so you would be fine with a 640 credit score. Your solid income is a great benefit as well.
[Promotional content and hotlinks removed by moderator. Please see our Good Neighbor Policy for more information about posting in Advice.]
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- steven stewart, "Steve Stewart Sr"
- Contributions:27
our Credit score for FHA loans goes down to 580 fico and paying off collections may not be needed if thats all you have. I can look at a prvious credit report and tell you
Steven Stewart
- Roswell Moore, C.M.P.S., "Mortgage.Coach"
- Contributions:104
Cal1970,
Since the charge-off is greater that two years old, it is ignored. It's not used to calculate the debt-to-income ratio.
I hope that answers your question.
All the best,
Ros
Roswell Moore, CMPS
Certified Mortgage Planner
Since the charge-off is greater that two years old, it is ignored. It's not used to calculate the debt-to-income ratio.
I hope that answers your question.
All the best,
Ros
Roswell Moore, CMPS
Certified Mortgage Planner
- Cal1970
- Contributions:5
What is the latest on this?
Were you able to get an FHA loan?
Did you have to pay off the collection first?
How did they treat the charge off?
Were you able to get an FHA loan?
Did you have to pay off the collection first?
How did they treat the charge off?
- causefx
- Contributions:10
Thank you all for the advice. I have in fact contacted other lenders and one that is working with me right now is confident we can get it done. I had him pull my credit as well and the middle score is in fact 640. He also stated I would only need to payoff the active collection. I only have $5k for a down payment which is why I wanted an FHA loan. He is quoting me about 4.75% and available to buy up to $125,000. I just sent him all my personal documents (W2's, paystubs, 401k, checking and savings statements). I hope there are no issues. Should I keep shopping?
- NeedinFHA
- Contributions:122
Well, I had over 100k in student loans, pretty much a debt to income ratio of like 60%, 4 maxxed out Credit Cards, plus other misc stuff and a bankrupcy back in 03.
If I can get approved you surely can with no issues.
If I can get approved you surely can with no issues.
- Massey Kouhssari, "BankerBroker"
- Contributions:83
Your loan sounds like would be a slam dunk deal. Your comments about your lenders response seem to indicate that your lender thinks your score is lower than you state. For he/she is recommending raising your score. With the given facts: 640 Mid Score, 48k annual salary, $621 monthly debt, I am estimating your down payment at 14334. If your down amount is less or any figure could be revised if indicated. You should be able to qualify for the following. This is all based on estimates:
Estimated Affordable Home Price $286,677
Estimated Affordable Home Price $286,677
Down Payment $14,334
Total Loan Amount $272,343
Loan-To-Value (LTV) 95%
Mortgage Rate 4.75%
APR 4.837%
Charge off to be paid at closing only on active collection account. No need to pay charge off if a charged off letter is provided by the creditor.
Mortgage rates could change daily. Actual payments will vary based on your individual situation and current rates. Some jumbo products may not be available to first time home buyers. Lending services may not be available in all areas. Some restrictions may apply. Based on the purchase/refinance of a primary residence. We assumed (unless otherwise noted) that: closing costs are paid out of pocket; this is your primary residence and is a single family home; debt-to-income ratio is less than 49%. Please remember that we don't have all your information. Therefore, the rate and payment results may not reflect your actual situation
Charge off to be paid at closing only on active collection account. No need to pay charge off if a charged off letter is provided by the creditor.
Mortgage rates could change daily. Actual payments will vary based on your individual situation and current rates. Some jumbo products may not be available to first time home buyers. Lending services may not be available in all areas. Some restrictions may apply. Based on the purchase/refinance of a primary residence. We assumed (unless otherwise noted) that: closing costs are paid out of pocket; this is your primary residence and is a single family home; debt-to-income ratio is less than 49%. Please remember that we don't have all your information. Therefore, the rate and payment results may not reflect your actual situation
- Deborah Garvin, "loanmonarch"
- Contributions:438
There should be local, direct FHA lenders in your area who will allow the collection and charge off to be paid at close. As a mortgage planner, I would recommend that you do not pay them off prior to the closing because the pay off may very well affect your credit scores negatively (I understand that it is counter-intuitive, but sometimes paying off, or down, debt can have an adverse impact on your scores.
I know a excellent mortgage banker in your area if you want a referral. Best of luck.
I know a excellent mortgage banker in your area if you want a referral. Best of luck.
- XanderTeam
- Contributions:27
I'm almost positive there are lenders who will close your loan, even with the collections left open and there certainly are lenders who would allow the collection to paid off at the closing table.
I'd recommend you continue shopping.
I'd recommend you continue shopping.
- Roswell Moore, C.M.P.S., "Mortgage.Coach"
- Contributions:104
Hi causefx,
Congratulations on your pending new home purchase! As you are finding out, lender overlays, meaning that certain lenders add additional guidelines for you to be approved for a loan, can be a problem as you are seeing. Certain lenders do not have an issue with charge-offs over a year old. Sounds like you may be going through a mortgage broker rather than a mortgage bank. We are one of those banks. You should be able to pay off your loan at closing. I am with a local mortgage bank where we process, underwrite & fund our own loans, including FHA loans & am happy to answer any of your questions. Please feel free to contact me or "Google" me if you have any further questions I can help you with.
All the best,
Ros
Roswell Moore, CMPS
Certified Mortgage Planner
NMLS 263779
Congratulations on your pending new home purchase! As you are finding out, lender overlays, meaning that certain lenders add additional guidelines for you to be approved for a loan, can be a problem as you are seeing. Certain lenders do not have an issue with charge-offs over a year old. Sounds like you may be going through a mortgage broker rather than a mortgage bank. We are one of those banks. You should be able to pay off your loan at closing. I am with a local mortgage bank where we process, underwrite & fund our own loans, including FHA loans & am happy to answer any of your questions. Please feel free to contact me or "Google" me if you have any further questions I can help you with.
All the best,
Ros
Roswell Moore, CMPS
Certified Mortgage Planner
NMLS 263779
- causefx
- Contributions:10
I have absolutely NO judgements, no bankruptcies or foreclosures. I will be very interested in finding someone to work with that can do as you state. Thank you
- Michael DeChristofano, "MortgMan77"
- Contributions:1
Hi "cause"
This would involve certain Lender overlays. That is when FHA has a guideline, but the lender imposes a guideline more harsh than that of FHA.
These cases are normal and occur all the time. In our situation, as long as these are not Judgements we will underwrite the loan and have them paid off as part of the Mortgage Comittment..
Also I would save the money that you were going to use to payoff your $300.00 CC and put it towards your collection. The $15.00 month payment is not hurting your DTI at all.
Michael DeChristofano
NMLS#214287
Home Loan Specialist
Residential Home Funding Corp.
[Contact info deleted by moderator]
This would involve certain Lender overlays. That is when FHA has a guideline, but the lender imposes a guideline more harsh than that of FHA.
These cases are normal and occur all the time. In our situation, as long as these are not Judgements we will underwrite the loan and have them paid off as part of the Mortgage Comittment..
Also I would save the money that you were going to use to payoff your $300.00 CC and put it towards your collection. The $15.00 month payment is not hurting your DTI at all.
Michael DeChristofano
NMLS#214287
Home Loan Specialist
Residential Home Funding Corp.
[Contact info deleted by moderator]
- causefx
- Contributions:10
I don't know. That is all he told me. No other information was given to me.
- Chris Milker, "CMG Financial"
- Contributions:255
You are going have to find another lender that is more knowledgeable. He should have been able to run your loan in automated underwriting engine and received a determination. If the determination showed approve / eligible, then an underwriter will review the loan and make a credit decision. If the determination showed refer/ ineligible then you have a problem. Was either done?
- causefx
- Contributions:10
I am looking to buy, so this is for a first time buyer purchase. I have never owened a home nor have any other credit issues ever. Initially he told me, I would be prequalified for 150,000
- Chris Milker, "CMG Financial"
- Contributions:255
You might have to find another lender. How old is the credit report? How many mortgage inquiries have you made in the last 12 months?
- causefx
- Contributions:10
It didn't sound like the lender was willing to have me pay at or right before closing. This was his response:
"It was good talking to you this weekend. Thank you for your email.
Your credit numbers and recent history are excellent. However, in today's world the past due account and write offs will pose a real problem trying to secure you a loan.
So in summary, I am sure that as soon as the items are addressed, removed or paid your credit score would greatly increase and we should be able to secure you a home mortgage. "
- Chris Milker, "CMG Financial"
- Contributions:255
The lender that you are working with should be able to get loan approval with the stipulation that the collection and charge-off be paid off at or prior to close. A credit report is vaild for 90 days. As long as they will use the the current credit report and just require proof of payment you should be fine.
- Jeff Masich, "Arizona Homes Land"
- Contributions:508
Dear Cause:
If there is a documented dispute you may be able to get approved. If everything else is good, this improves your chances. If you need a lender that works with "hard to get approved" mortgage loans, feel free to contact me.
May I wish you the best.
Jeff Masich, Realtor
Arizona Homes and Land
HomeSmart
Scottsdale
If there is a documented dispute you may be able to get approved. If everything else is good, this improves your chances. If you need a lender that works with "hard to get approved" mortgage loans, feel free to contact me.
May I wish you the best.
Jeff Masich, Realtor
Arizona Homes and Land
HomeSmart
Scottsdale
- causefx
- Contributions:10
I understand that it will need to be paid off before closing, but there is a lot of conflicting information about when to pay it off. I don't have a problem paying them off at closing if someone is willing to give me an approval with that condition. I have just heard not to pay them early since it will lower the score.
- Chris Milker, "CMG Financial"
- Contributions:255
There is not a lender that I am aware of that allows non-medical collections and charge-offs to be left open. Typically all non-medical delinquent credit must be paid off at or prior to closing. This includes taxes, judgments, collections, charged-off accounts, tax liens, mechanics' liens, and liens that have the potential to affect the lender's lien position or diminish the borrower's equity.
Need FHA loan. Fico 640 have 1 collection and 1 charge off from 2007
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