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FHA Default School Loan/Preapproval

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Anonymous
Not applicable

FHA Default School Loan/Preapproval

Here it goes,

 

I applied for a preapproval before I was truly ready credit wise. I just tried with the thought of the wonderful $8000 tax credit. I was preapproved for a FHA loan which shocked the heck out of me. I understand that they will find out about my ugly history with my student loan. The loan last I checked was $1800 and that was in OCT 09. I also owe the state in back taxes totaling about $1000.00 My federal taxes are fine, they are in a repayment plan and have been for about 9 months. Now my available cash is very limited. THE QUESTION IS: 

 

1. Give up pay off the debt try again another time, hope the tax credit gets extended.

2. Settle the student loan (currently not on CR) and pay the minimum I can to simply get rid of them.

3. Pay the state tax or set up payment plan

4 Wait until the LO runs the Caivrs report and he tells me what to do; or will he dump me with out recourse?

5. Is there hope considering I owe back taxes that the LO will let it go through because as you know they will simply take the refund tax credit and apply to all amounts owed?

6, Should I call him fess up before and take his advise? 

Being that I dont have a lot of available cash I dont want to pay off things I dont have or if I can make arrangements and pay monthly it would be great while still get my FHA loan. 

Thanks!

 

Message 1 of 3
2 REPLIES 2
Anonymous
Not applicable

Re: FHA Default School Loan/Preapproval

let him know the situation up front.

 

They are going to make you pay off the student loans and the tax es (both federal and state.....)  The payment plans only gets you off the hook if you have 12 months reported payments made and then they will count it on DTI levels which would likely affect your DTI.

 

Student loan will not likely settle.  They will expect full payment.  (if it is a federal loan, and not a private loan).  If it is a private loan and they know you are looking at a house, they will come after you for the full amount as well because they know they have you over the barrel.

 

In the end, if you do not have enough cash on hand to pay off both state and federal taxes, pay off the loans, and have money for down payment and closing costs then you are probably not ready to buy a house.  Do not rush to buy because of the tax credit only to put yourself in worse shape.  (IMHO the tax credit will NOT be extended)

Message 2 of 3
BrianB_The_Loan_Professor
Valued Contributor

Re: FHA Default School Loan/Preapproval

#1 - they have to go away

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Brian B The Loan Professor
Mortgage Banker - offering FHA, VA, USDA , and Conventional mortgages in all 50 states -

If I do not respond to a follow up question please feel free to contact me directly
Message 3 of 3
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