Valued Contributor
JM-AM
Posts: 3,303
Registered: ‎06-09-2010
Re: FHA Qualifying Chances and CA Settlement reporting importance

Are your scores present after payment of collection reporting? Or your collection payment is not showing as of yet?

 

Your income is sufficient for the amount of home you want to purchase.

 

DTI is excellent.

 

Employment is W2 and good at 5 years.

 

12k in reserves presently is good amount, but if you are paying the closing cost this will be about $0 after down payment and closing cost. But still qualifiable.

 

Some times paying off the collection can hurt you more then help you when applying for a mortgage. But in my opinion being responsible and paying off your debt is always the right thing to do.

 

Once your collection payment reports, will be a determing factor.

 

What are your positive tradelines?

 

How old are your positive tradelines?

 

The present information you gave you would qualify, except you still need to see if paying the collection brought your score down. I would wait until reports update and see if your scores were impacted. If they stayed above 640 you still would be fine to qualify depending on other credit information needed from positive, open tradelines.

Good Luck
May all your dreams and wishes become a reality!