Planning on trying for an FHA in Spring..

[Anonymous]

So is the remaining  500-600 that is owed going to hurt me? Is the FHA loan going to require that I pay all of them down to zero?

[ShanetheMortgageMan]

FHA never requires collections or charge-offs to be paid, but the lender may have their own overlay guidelines that do require it.  However as long as the lender you go to doesn't have a policy that requires collections & charge-offs to be paid if they are over a certain amount, you shouldn't be required to pay it as a condition of your loan approval.

[Anonymous]

However, their status will affect the interest rate we get or are FHA's fixed rate once you qualify regardless of credit score (assuming your existing score qualifies you)?

Shane you're awesome - thank you! It's so hard to find information without going into a place, scheduling a time to sit down with a LO and have them to a hard inquiry on your credit, etc etc..

[ShanetheMortgageMan]

It won't affect the rate you are offered either.  Some lenders have rate adjustments depending on your FICO score, but not due to there being collections still owing, etc.  You are welcome, feel free to come back and get further advice along your journey to homeownership.

[Anonymous]

is the FHA interest rate fixed?

[ShanetheMortgageMan]

You mean is the FHA interest rate fixed (the same) at all lenders?  No, it can vary from lender to lender, but most should be within .250% of each other.  Some lenders who specialize in riskier credit might have even higher difference though, and for lower scores (below 620, but some lenders even have adjustments below a 660 or 680) a higher rate could be expected too.  FHA mortgages offer a 15-year fixed rate, 30-year fixed rate, and adjustable rates which are fixed for an inital period of time, then adjust once a year afterwards.