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Getting a mortgage with old collections

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New Member

Getting a mortgage with old collections

Hello all, I am new to the forum and what I have been reading through the many posts has really opened my eyes about my credit situation. 

 

Here is my situation:  I am looking to buy another home in the near future.  This time around from what I have been reading, it seems like its whole lot harder to get approved and closed for a loan.  My main question is when loan officers are looking at your preliminary credit scores, what do they consider if your credit score is in the mid 600's.  I have a few old collections, and I have paid off any judgements I have had in the past.  My credit has jumped considerbly because I have paid my mortgage on time for 3 years, and had 2 car payments on time for 1 year a piece.  No credit card debt! 

 

I just want to get in a get fha approval but it seems like it getting so much harder.  Some people say pay the collections, use a pfd letter, or not pay them till closing.  Its all confusing.  Even if I can raise my score to high 600 range, is an approval going to be possible with collections? 

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Community Leader
Super Contributor

Re: Getting a mortgage with old collections

Typically collections with FHA do not need to be paid unless they are large, and so if yours are older and your credit is decent, then unless any are over $5k each I wouldn't be too worried about it.  If they are required to be paid then I would make sure the underwriter is OK with you paying them off at closing, and not requiring you pay them off prior.

Helping people with mortgages (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Orange County, CA and lending in all 50 states
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