Paid collection / Charge off question

[700bound09]

I'm in the process of trying to remove a paid collection (medical) and a charge off (electric bill $300 unpaid bill)  before applying for a FHA mortgage. I've read other posts where some lenders require you to pay off collections. Does that apply also for charge offs? I don't want invest in paying that and this effect my credit. This comes off in 2 years from my report.

Also, with this lingering on my credit should I be concerned about getting approved? I have other compensating factors, 680+ EQ and TU, low DTI, 3.5% down payment, reserves, good income. Also, no lates in the last 24 months, last 30 day late was back in 04.

Message Edited by 700bound09 on 05-14-2009 01:56 PM

[ShanetheMortgageMan]

FHA doesn't require collections or charge-offs to be paid off, with your credit scores and since they were from awhile ago and what not I seriously doubt you would as well.  Make sure you ask that question to your lender before you apply though - for example Bank of America Home Loans will require pretty much all collections & charge-offs to be paid, but that is not all lenders and not even most of them, so ask questions before your credit is checked.