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Waiting for items to fall off

New Member

Waiting for items to fall off

I want to apply for a mortgage loan next month, but my cs is only 610. I have improved my cs by 60 points within the last month by paying off all items except for my student loan and two  neg. items that will fall off in May of this year. Should I just wait until June to apply for a mortgage loan or will the lender just over look those two items. This may be a crazy question, but I have no knowledge about how this works.
Message 1 of 7
6 REPLIES
Moderator Emeritus

Mopre than likely a mortgage lender will require you to p...

Mopre than likely a mortgage lender will require you to pay those two negatives off before authorizing a home loan.
 
HTH
Message 2 of 7
Regular Contributor

Depends on their size and your state's statute of limitat...

Depends on their size and your state's statute of limitations. Many mortgage lenders would overlook small items (and "small" varies by lender). Some would require it to be paid before locking in a rate. Some would require it to be paid at closing (which is better than paying earlier because it won't have the possible side effect of dropping your score).

Since we're only talking two extra months, I'd wait for them to fall off, personally.
Message 3 of 7
New Member

I use to be a mortgage loan officer, and I will give you...

I use to be a mortgage loan officer, and I will give you the low down on mortgages and credit.  Your actual interest rate depends on several factors.
 
1.  Credit score:  Your credit score will typically determine whether or not you qualify for a Conventional (A-paper) or a Un-conventional (Sub-prime) loan.  If you are looking for 100% financing, then you will need about 680+ for A-paper, and around 600+ for subprime.  Now you can probably go as low as 580 subprime if you can show 2 to 6 months worth of cash reserves depending on the lender.
 
2.  Interest Rate:  Many factors come into play when determining interest rate.  Amount financed, loan size, type of home, whether rural or suburban, rental history, type of occupancy, how much income documentation is provided, and credit score.  Credit Score:  Interest rates are typically in 20 point brackets......580-600, 600-620, 620-640, and so on.  If you are sitting at 615, but raise it to 620....you qualify for a lower rate.  The only exception would be FHA and VA loans.  The interest rate is the same for all credit scores.
 
3.  Collections:  The amount of collections only comes into play on Conventional, FHA, and VA loans, as most sub-prime lenders do not care about collections.  Conventional lenders usually only care that your total collections don't exceed $5,000.  FHA usually only cares about collections that are 1 to 2 years old, and want to see clean payment history for the last 12 months.
Message 4 of 7
Moderator Emeritus

Hoopty, is that dependant on the bank.  My (recent) mortg...

Hoopty, is that dependant on the bank.  My (recent) mortgage is Va and I was advised by several lenders in my area that no one would approve a loan wit active collections.  Keep in mind the two I had were for less than 200.00.  I managed to pull 100% financing on both FHA and Va and 5.25 conventional with my lowest score being 639 at the time.  Didn't have a lot of cash so thats all she wrote for cash reserves.
 
I think it depends on what area of the country you're in as well. I did have to do a lot of income verification.  Thre years tax return and all that.  With the subprime market going belly up, goodness knows how strict those requirements are now though.
Message 5 of 7
Regular Contributor

Re: Hoopty, is that dependant on the bank. My (recent) mortg...



Brammy wrote:
Hoopty, is that dependant on the bank. My (recent) mortgage is Va and I was advised by several lenders in my area that no one would approve a loan wit active collections. Keep in mind the two I had were for less than 200.00. I managed to pull 100% financing on both FHA and Va and 5.25 conventional with my lowest score being 639 at the time. Didn't have a lot of cash so thats all she wrote for cash reserves.
I think it depends on what area of the country you're in as well. I did have to do a lot of income verification. Thre years tax return and all that. With the subprime market going belly up, goodness knows how strict those requirements are now though.





Did you PFD the collections or just pay them off?

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Message 6 of 7
Moderator Emerita

Re: Hoopty, is that dependant on the bank. My (recent) mortg...

Oh my gosh, this has to be the oldest post that I've ever seen be resurrected!

tryingtogetitrightnow, Brammy is sort of buried in her business right now, getting ready for tax season. I don't know when she'll see this post. good luck
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 7 of 7