Jumbo Loan with Collections

[Anonymous]

Hello, first post.....

I am looking into getting a jumbo loan (hopfully next year) so with that I am starting to look at my credit more carefully, I currently have a FHA loan (no missed/late payments). My house I bought for 169K and current market value at 230K. With that said, I have a few accounts in collections that I am about to pay off (Have 4 with portfolio recovery) by the end of summer I will have had them paid, and according to PR they should get deleted. Will having charge offs affect my loan application even if I paid (full disclosure I do have one that is settled legally for less than full balance, chase card)? My wife will have close to an 800 score and I should be anywhere from 700-760 range when I am needing to get this loan. (Our combined income is at 140ishK with DTI at 28% that including house, student loan, CC, car loan). All current CC are at 0 balance, we just have student loans, car and house payment left on our credit report, with the exception of my 4 PR accounts that are in , for a lack of better words, "good standing lol"

[youdontkillmoney]

I got a jumbo loan and shopped around for the best rates and features and it was the "wild west." Banks usually keep the jumbos and don't sell then off since they're profitable for them to service. That being said they'd want to be in the jumbo space for the long haul. This translates into a good customer that will pay on time and the minimum due. This translates into a good credit history. However, being the wild west, banks and non bank lenders (you may have a better chance with non banks understanding what I just explained) will look atthe totality of circumstances, income, employment etc; and of course the charge offs. I think that is already one nail in the coffin. You can try though if you really have to get a jumbo, but if it were me, I'd make my credit report as clean as possible or spotless even if it means delaying the jumbo app to increase your chances.

[Anonymous]

Thanks for the reply, I definitly could wait until the credit is absolutly clean, but reality is that I have pretty much everything in order but the charge offs now. I have the income, employment status, money, just them dang charge offs now is what is bothering me (had unexpected medical issues come up in (2016/2017). I did some research on this and some people are stating as long as you paid them off I should have no issues, and some people telling me I need a clean report.....A tad frustrating and a tad to early to bother a loan officer on it. I signed up for skyblue to give me a hand and they have removed 7 accounts from my report, just these 4 original creditor accounts are stubborn (my fault completly) 

[Revelate]

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@Anonymous wrote:

Thanks for the reply, I definitly could wait until the credit is absolutly clean, but reality is that I have pretty much everything in order but the charge offs now. I have the income, employment status, money, just them dang charge offs now is what is bothering me (had unexpected medical issues come up in (2016/2017). I did some research on this and some people are stating as long as you paid them off I should have no issues, and some people telling me I need a clean report.....A tad frustrating and a tad to early to bother a loan officer on it. I signed up for skyblue to give me a hand and they have removed 7 accounts from my report, just these 4 original creditor accounts are stubborn (my fault completly) 

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The score matters, you will have to write an explanation for the negatives if they ask it, but ultimately money talks.

I wouldn't wait till I was pristine, hell I had a paid collection and paid tax lien and 30/60 late on my reports when I got a contingent approval at 1.1m from Chase back in 2015.  People get approved with open collections on non-jumbo and those are almost always more strict in terms of everything but money.

You may have to talk to a few lenders but as YDKM said jumbo loans are the wild west, basically no rules though they follow the typical mortgage conventions for the most part... but it should be solvable.

[Anonymous]

Yea I guess I should write somthing down sooner so everything is still a tad fresh in my head, in case they ask for it. That sounds like it could go that direction. "Why do you have good income but have charge offs" kind of conversation.... 

Thanks