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Preparing for a mortgage loan...need advice with old CO's and CA's

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TX_to_Cali
Member

Preparing for a mortgage loan...need advice with old CO's and CA's

Hi Everyone!

New to the forums and this is my first post, but I have done a lot of reading here and found the posts from everyone extremely valuable.

 

So here is my situation.

 

In 2009 we went through a very rough financial time.  We had over $140K in CC debt.  Due to salary cuts and all of my creditors reducing my CC limits at the same time, I was unable to pay the mimimums on all our bills.  I called them all and tried to negotiate reduced payment terms, but only some would agree.  The ones who agreed and helped me out I have been paying on religiously.  The ones who didn't I had to make a hard decision to stop paying them.

 

So here I am 4 years later and trying to clean up my credit to get a mortgage hopefully within the next year or so.

 

I have paid off $40K of it over the last 4 years, and have about another year left to finish paying off the last $10K of what I have planned to pay off with the original creditors.

 

That still left about $90K that was charged off by the original creditors.  About $66K of that I recieved a 1099-c (cancellation of debt) last December, and paid all the taxes on the settled amount in my tax payment for this year.

 

So the final $24K is with CA, and being reported on my credit reports constantly.  I have recieved settlement offers for about %50 of original balance on these, but they are all outside SOL, now, so I haven't decided what to do about them yet...

 

So here is where I need advice...I have relatively good credit of about 700 on all 3 bureaus, but I'm not sure how all these charge off's and the 3 remaining CA accounts are going to affect my mortgage loan (OK I know they aren't going to look good, but I need to know what needs cleaning up and by how much?)

 

Please offer any advice you can.  I would be most grateful.  I would be happy to provide additional details if necessary.

 

Message 1 of 8
7 REPLIES 7
TX_to_Cali
Member

Re: Preparing for a mortgage loan...need advice with old CO's and CA's

91 views and not a single response?  I'm beginning to think the mortgage loans forum is dead. : )

 

Message 2 of 8
djacks
Valued Member

Re: Preparing for a mortgage loan...need advice with old CO's and CA's


@TX_to_Cali wrote:

91 views and not a single response?  I'm beginning to think the mortgage loans forum is dead. : )

 


In all fairness, this subcatagory is about mortgages. Your question is how to clean up credit. Just because your long term goal is to get a mortgage, it really has nothing to do with the question. Ask the mods to move the question to the appropriate catagory where it's likely to get responses.

Message 3 of 8
TX_to_Cali
Member

Re: Preparing for a mortgage loan...need advice with old CO's and CA's

Thanks for the reply djacks!

 

Well I think I put too much information in my original post, but my real question was...Can I have old charge offs on my credit and still get a mortgage?

 

I am pretty sure I would need to get my 3 collection accounts settled or paid.

 

I am really looking for someone familiar with mortgage lending to give some advice on what the usual requirements are?

 

I will seek professional advice from a lender, but I don't want to get my credit pulled before I take care of whatever needs to be taken care of...

Message 4 of 8
HoldingOntoHope
Valued Contributor

Re: Preparing for a mortgage loan...need advice with old CO's and CA's

The short answer is Maybe Yes / Maybe No. There are a variety of different qualification requirements depending on which type of loan program you are going after such as VA, USDA, FHA etc. and then after that there are sometimes more stringent lender overlays. So even if a loan program allowed you to disregard certain debts, an individual lender might still require them to be paid.

 

Among the things that will make a difference is the age of the original debt, the statute of limitations, and the amount. No lender wants to be left open to the possibility of a judgment coming into play and the property being collateralized. Your scores are fine assuming they are FICO scores. Your best bet is when you feel ready to purchase a home with money in the bank, etc. is to contact a mortgage broker (not an individual bank) and have them tell you what programs and options will work for your situation.

Best financial advice I ever got: "Just imagine what an adult would do and do that."

Starting Score: 500's
Current Score: EQ 701 (FICO) TU 721 (FICO) EX 715 (Quizzle)
Goal Score: 760 ALL


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Message 5 of 8
TX_to_Cali
Member

Re: Preparing for a mortgage loan...need advice with old CO's and CA's

Thank you!  That helps alot.  All my delinquents are over 4 years old, so should be fine.

 

Thanks again!

Message 6 of 8
1LNurse
Established Member

Re: Preparing for a mortgage loan...need advice with old CO's and CA's

Hey Tx,

It truly depends on the age of the debt. According to FHA guidelines, if the debt is more than 1500 and greater than 2 years..it does not need to be paid, however each lender is different. However based on the amount, a lender may be concerned about a judgement against you. Do consult a lender, it doesnt cost a thing to do so , I consulted over 10 lenders/mortgage brokers before choosing a lender that did not require payment of an old CO

Message 7 of 8
nicholasyud
Valued Contributor

Re: Preparing for a mortgage loan...need advice with old CO's and CA's

Ask on rebuilding credit thread.
Starting Score: 560
Current Score: ?
Goal Score: 800
Message 8 of 8
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