Mortgage chances with an open collection

[Anonymous]

Shane the mortgage man,

I have been preapproved for $205.000 and i am under contract for a home at $147.000 and my current 3rd party i am going through is worried about a open collection account of $2,500 and some late payments on another account that is a year old and paid off. My credit to debt ratio is 70% available credit and my score is 640 average - 671 the highest, i make $70,000 a year.

The underwriter from the 3rd party wont be back until Wednesday and is worried about turning this in from what she told me today. The Bank we will be going through will be Wells Fargo, Do you think they will approve the loan ?

[Anonymous]

Anyone have any advice ? I would rather not worry all weekend long or try to find a replacement if I do need to worry

[Booner72]

You addressed your post to Shane, so I guess people are waiting for him to show up. Shane hasn't been around a while, though.

[Anonymous]

I have written a LOX that will take care of the gym membership that was an open account, if anything is explainable, I feel a gym membership would be it.

[kariered]

I"m not Shane, but still closed on my house back in December 2011 with one collection. I can't remember what the collection was for, but it was several hundred dollars. My credit score was about the same as yours. I'm not sure if you are going conventional or FHA. My loan was an FHA. The collection showed up right as the loan was about to go into underwriting too, like just in the nick of time, so I was pretty nervous. However, it still went through. I don't think I would pay it or do anything about the collection just yet. sometimes paying collections off don't really help you. It depends on how you negotiate with the CA and usually half the time the collection still shows up on your report even after you paid it. I don't know if that helps you or not....just stay in touch with your loan officer and keep your fingers crossed! Good luck!!!!

[kariered]

oh yes and be prepared if dealing with Wells Fargo underwriting. They are known to take a long time in underwriting. If your loan officer says 3 days, it will probably be more like 2 weeks. I know several people who were in WF underwriting for a long time...just fyi. This was also back in December, maybe it is different now...

[imandy]

Two things...

#1 if it's more than $1000 it will have to be paid off before closing. Count on it and get the money ready now.

#2 it depends what the collection is for. If the collection is for housing (an old apartment, eviction etc) you could still be denied even if you agreed to pay it. I was denied by Suntrust on an old apartment collection that was 3 years old and PAID and my scores were over 700 with 20% down!