I know one must have a clean report for 12months to be approved for FHA...I have a chase acct that was charged off in 2011 & then bought by Midland. If I pay this charge off/collection will it restart my 12months clean history or is it just for open accts in the past 12 months?
If applying for a mortgage paying off the debt will not increase your scores. Now if you can have the charge off or collection removed with a PFD that would benefit you.
If your scores qualify you now for a mortgage I would not address the charge off or collection just yet. Since was charged off in 2011 it is over the 12 month period, so that should not be an issue.
Take some time and speak with a LO or Broker and be upfront about it. Let them know that you have no issues with paying the charge off or collection, but prefer to pay it off during closing. Just a little reminder that most likely you would not have much negotiation with creditor and would most likely have to pay it in full especially if it is within the SOL.
My scores won't let me qualify yet, but it's over $1000 and I want to do a FHA loan. It's with Chase/Midland so I'm prolly not going to get a PFD with everything I have read. Wed like to buy this time next year and if I do pay this I will have to pay it off over 6 months...which would make it paid off just shy of 6 months from applyingI it's not a new collection. So if I do pay it off over the next 6 months will it hurt me when I apply in jan 14'?
DO NOT PAY IT OFF, that could lower your score.
When your scores are ready for a home loan, pay off the collection at closing. You wanna take the score hit after you close.
Eeeeeeeeek how much would It lower it if I paid it? It's $3600, if I paid it at closing that would be lots of dough I'm shelling out along with closing cost. Sigh.
If you make payment arrangements then they have the option to report the payments. Only the creditor, collection company can say if they will or wont, but I would not trust anything they say unless it is in writing. If they report it would be new activity and extend your waiting, if they dont report you should be fine pending you qualify with other requirements.
As far as FHA and the charge-off and or collection as long as it is over 12 months old you still have a chance to qualify with-out paying it. If they require you to pay it, then you can pay during closing.
Start at the rebuilding board and see if they can help you bring up your scores and go from there.