Question about rental verification and outstanding collections

[cd2004]

I posted this in another thread but decided to make my own post.

I am thinking about about applying for USDA guaranteed loan once I get my utli on my cards lower and see how my score increase. My main two problems are I have a judgement from 2009 that I pay $75.00 a month on and I dont have funds to PIF which is rougly about $2300 with trying to save for closing costs and clean up my credit. Also I have been taking care of my disable mother for the past 2yrs so I moved in her house and help her with the mortgage but i dont write checks or anything. I give her some money every 2wks when I get paid. I am reading post that say relatives would not count for rental verification, is it best just to move in my own apartment so I can have rental history first before applying for a home? Will the judgement count as outstanding collection within 12 months?

[MEE2Too]

Hello,

When you apply for a mortgage loan they ask you are your currently renting or living with family members. I doesn't make sense to get an apartment since you are trying to save for closing cost/downpayment and other fees invovled in the home buying process. In terms of the judgement it is really what the underwriter wants some would want the entire judgement paid off as a condition of closing and other would just like for you to continue making payments on time. I would suggest that you pay the judgement off and be ready to write a letter of explaination about the reason this account had to had a jugdement placed on it. Other than that you should be fine.. Good Luck in your home process.

Thanks,

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[luvsandyshores]

If I remember correctly from my USDA experience, they want judgments paid in full, or they want to see that you have been paying on it for the past 12 months, with no lates.

[cd2004]

thanks so much. I started paying on the judgement in 2009 on time every month since then. This was a credit card I defaulted on in 2004, I got the card 3years prior when I was 18 yrs old and irresponsible. They jacked up the amount after court cost and interest. The original balance was $1800 but after judgement $4200. I wish i would have found this board back in 2009 because I think Midland filed it when it was out SOL and won default judgement. I hope that I can get my scores in 650 range by end of year so I can do preapproval for USDA beginning of the year.