I am planning to apply for a USDA mortgage loan in the next few months. I have an old judgment I have started the negotiation process with. I have yet to receive a response from them. I offered them 10% and asked for it to be reported at paid in full.
My ultimate desire would be to PFD. I am not in a position to do this anytime soon ($2.5k) and I am not in a position to hold off on the mortgage either. We need to get into a bigger place.
If there is equity in the home when I get to that point, can the $2.5k be added to the mortgage through USDA to pay for it since I know they will require it to be paid prior to closing?
I do not want to take out a smaller loan to pay it right now either. Well, I could, but I don't want it to affect the loan process.
Only the closing costs can be included on a USDA loan (by the amount of the appraised value over the purchase price), can't wrap in debts. Judgment is going to have to be dealt with somehow. If you were on a payment plan for 12 months then the lender could just include the debt into your debt ratio and not pay it off (just like if you got a loan to pay it off). Judgments are a pretty big deal as you have figured out.
As long as it is required right before closing, and not a great deal of time prior, then I should have time to be able to save enough to pay it off or negotiate a settlement.
I have not been in a payment plan. They have not bothered me about it since the judgment was placed over a year ago. I honestly didn't even think about it until the notion of buying a home entered my mind recently.
Yeah it'd just be a requirement for the judgment to be paid at closing, title company would collect the extra amount and disburse it directly to the plaintiff's attorney. Payoff statement would need to be provided by the plaintiff's attorney.