student loan and mortgage loan

[Anonymous]

I have a student loan that was is default and I am now in a repayment program with them. (US Depart of Ed). The account shows in collections, but the lender stated that after 10 months of payment, it will report positively. They will remove any negative history.

Should I wait until after the 10 months to apply for a loan or will a lender take this into account? I cant pay it off in full. The payment is $80/month, although I may opt to increase the payment amount later to get the loan paid off faster. I dont want to do that now if its going to be added into my dti ratio. 

Also, how do you know if a lender will require something to be paid off before closing? I have a few old collection accounts that I cant seem to get removed but they are welll beyond SOL for my state.  I have the $, but need to calculate these possibities into my situation to make sure I have enough for the down and closing costs. THX

[GFer]

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@Anonymous wrote:

I have a student loan that was is default and I am now in a repayment program with them. (US Depart of Ed). The account shows in collections, but the lender stated that after 10 months of payment, it will report positively. They will remove any negative history.

Should I wait until after the 10 months to apply for a loan or will a lender take this into account?

 Seems I read a post about this. Do a search on this. I believe the individual just had them fax a copy of repayment agreement?

 I cant pay it off in full. The payment is $80/month, although I may opt to increase the payment amount later to get the loan paid off faster. I dont want to do that now if its going to be added into my dti ratio. (It IS counted in your DTI, so definitely would not have that changed now. Besides; you can always pay extra against the principal, so why not keep it as it is (just in case somewhere down the line you need the extra for something else. That way your not obligated to a larger payment!   )

Also, how do you know if a lender will require something to be paid off before closing? Just ask them! This depends on your individual lender and what kind of ca it is.

I have a few old collection accounts that I cant seem to get removed but they are welll beyond SOL for my state.  I have the $, but need to calculate these possibities into my situation to make sure I have enough for the down and closing costs. THX  You will actually lose points on your credit score for paying these, as FICO sees these as more recent! (Take it from someone who found out the hard way!)

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[ShanetheMortgageMan]

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@Anonymous wrote:

I have a student loan that was is default and I am now in a repayment program with them. (US Depart of Ed). The account shows in collections, but the lender stated that after 10 months of payment, it will report positively. They will remove any negative history.

Should I wait until after the 10 months to apply for a loan or will a lender take this into account? You need to wait until the payment plan has completed.  I cant pay it off in full. The payment is $80/month, although I may opt to increase the payment amount later to get the loan paid off faster. I dont want to do that now if its going to be added into my dti ratio. If you have a payment on it, then with an FHA mortgage it'll be included in the DTI unless the payment is less than $100/mo and has 10 months or less... then it'd be excluded.

Also, how do you know if a lender will require something to be paid off before closing? I have a few old collection accounts that I cant seem to get removed but they are welll beyond SOL for my state.  I have the $, but need to calculate these possibities into my situation to make sure I have enough for the down and closing costs. THX  If they are old collections lenders and you are going for an FHA loan then you shouldn't require you to pay them, but a good way to find out if they will require them to be paid is to ask the lender you are applying with.

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Message Edited by ShanetheMortgageMan on 02-02-2009 07:00 PM