How do charge offs affect my mortgage score

[Boxermom1]

I'm hoping to obtain a new construction loan in another 6 months or so.  My middle mortgage score is 672, and I'm hoping to bring it up to at least 700.  I plan on paying off two auto loans, and will hold onto the third one, which is only 150 per month.  I have just paid a big hunk on my paypal account, which was at 67%.  I had owed about $2000 on a $3000 CL, and now am down to about $700.  This has not been reported on yet.  All other CC are at 0 or close to it.  But I have several charge offs on credit cards that were settled about 2 years ago, and 2 lates on one car loan over 2 years ago.  Everything else has been paid on time.  I'm hoping bringing down that paypal account will help, and over the next month I will have that paid off, and won't touch it again.  It's mostly the charge offs that concern me.  I need a mortgage loan that will have a low down payment.  What are my chances?  Also, I have not owned a home in 7 years, and I had to do a short sale on that.  Will I qualify as a first time home buyer?

[homeloanexpert]

@Boxermom1 

 I can only speak to my experience regarding charge-off's. They are disregarded. Meaning they don't have to paid, the most I have my clients do is to write a LOE (letter of explanation) and that's it. Done!

[VALoanMaster]

---

@Boxermom1 wrote:

I'm hoping to obtain a new construction loan in another 6 months or so.  My middle mortgage score is 672, and I'm hoping to bring it up to at least 700.  I plan on paying off two auto loans, and will hold onto the third one, which is only 150 per month.  I have just paid a big hunk on my paypal account, which was at 67%.  I had owed about $2000 on a $3000 CL, and now am down to about $700.  This has not been reported on yet.  All other CC are at 0 or close to it.  But I have several charge offs on credit cards that were settled about 2 years ago, and 2 lates on one car loan over 2 years ago.  Everything else has been paid on time.  I'm hoping bringing down that paypal account will help, and over the next month I will have that paid off, and won't touch it again.  It's mostly the charge offs that concern me.  I need a mortgage loan that will have a low down payment.  What are my chances?  Also, I have not owned a home in 7 years, and I had to do a short sale on that.  Will I qualify as a first time home buyer?

---

Hi @Boxermom1,

The good news is, charge offs are generally ignored when it comes to underwriting guidelines and since you settled/paid them, you'll be totally fine.