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if i pay off collections will the bank approve my loan

my house is paid in full, but i need money for repairs, the bank said my credit is fine but because i have collections i can't qualify for any loan. how long will it take to be approved if i pay them off??
  • September 16 2013 - Harvard
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Answers (8)

We may be able to help you and depending on what type and how much the collections are, you may not need to pay them off.  Please give me a call or send me an email and I would be happy to discuss your situation with you to see how we can help.

Best regards,

Patty Harrison
Smart Mortgage Centers

  • September 25 2013
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If you have not mortgage payment and a good credit score, how old are the collections you have?

Most of the time getting a HELOC is harder then getting a first mortgage.

If your old enough,  What about doing a reverse mortgage?  They dont look at  credit score.

Good Luck
  • September 17 2013
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If you apply for FHA loan you will be approved, conditioned to pay off the collection accounts before the closing.
 If you pay them off, it will take up to two months to hit your credit, and then if your FICO score is acceptable you might be able to get a Home equity loan.
Best bet is to work with a lender to have your problem solved.
  • September 17 2013
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You should be able to get an approval with a good credit score even with some collections. Paying off your collections will help you in the long run, but immediately it will bring your debts current and drop your score for the short term. You should have a reputable, local lender look in to your situation.
  • September 17 2013
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Well paying off your collections will definitely help your credit score in the long run but you should speak to your lender about the other stuff. Your lender will be glad to help you understand the process and what to do.

Well I hope this helps! If you have any further questions or if you need a loan, feel free to contact me.

Good Luck!
  • September 17 2013
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The best way to get this answered is by having a lender look over your report. 
  • September 17 2013
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Typically as long as the overall credit profile and other factors are fine you can receive a "conditional" approval based on having to pay off collection accounts.

The short answer is that as long as everything else is fine you should be able to get approved. The long answer is that it depends on your overall credit profile and FICO scores.

If I can be of any further help please feel free to contact me. 
  • September 17 2013
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Your lender should be able to run a simulation model on your credit report that will tell them what the result of paying off your collections will do for your credit score.  If your accounts are in collections you may want to call and negotiate a settlement amount rather than sending in a check for the full amount.  Your debt has most likely been sold to another creditor at a large discount and you might be able to use this to your favor.  If you do go this route make sure to also negotiate the language that will be reported to the credit bureaus.  The comments left on your report can be as damaging as the history of non payment in some cases.  You can get a re score done in just a few days after making the corrections.  Each lender will be different as to what their underwriting guidelines are, I am hoping your lender will approve you once this is taken care of.   
Best of luck. 
  • September 16 2013
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