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I have applied for a FHA loan, I have 1 old collection account that is almost 4 years old on my credit for about $8,000. My LO told me not to worry about paying it because its so old. I know that FHA has a new guidline that any collections over $1,000 must be paid.
Will I have to pay this off or will it not matter because the account is nearly 4 years old?
$8,000 is a large amount. I would think they would want that paid; however, each has their own rules. Does it have a judgement on it?
My mid score is 653. There is no judgment on it. I am willing to settle it, but I am trying to hold on to the money in my savings to help with downpayment. My LO said it probably wouldnt matter, but I just wanted to get some others opinions.
@jayson79 wrote:My mid score is 653. There is no judgment on it. I am willing to settle it, but I am trying to hold on to the money in my savings to help with downpayment. My LO said it probably wouldnt matter, but I just wanted to get some others opinions.
what is the SOL on this debt? The fact of if you can be successfully sued for the debt might be the deciding factor if you will have to pay it.. if it is outside the SOL, the bank has no risk... if you are inside, they could sue and the mortgage could be at risk...
-scott
If your LO has a good relationship with underwriting and knows what has happened in the past you may not have to pay it.
I would cruise along and go with it, worst case be prepared to pay it.
@jayson79 wrote:. I know that FHA has a new guidline that any collections over $1,000 must be paid.
there is no such guideline.
some lenders might have that guideline, but FHA does not