Have you been working on your credit, but the past is still haunting you?  Here's how we treat some old debts.  If you'd like to talk abo, just contact us by phone  

What if I have a Judgment:

  • FHA: The judgement must show as resolved or paid off prior to (or at) closing.  Exception: A judgement is considered resolved if the borrower has made timely payments for at least 3 months of scheduled payments.
  • Conventional: Judgements must be paid prior to close with supporting documentation

Collections and Charge Offs

  • FHA: If the collections balance is greater than $2,000 the collections will need to be paid or you must qualify with a payment.  Charge offs however, do not need to be paid off in most cases.
  • Conventional: Based on property type:
    • 1 unit: borrowers are not required to pay off outstanding collections or non-mortgage charge offs
    • 2-4 unit: collections and non-mortgage charge offs totaling more than $5,000 may be paid in full prior to (or at) closing
    • Non owner occupied proeprties: collections and non-mortgage charge offs equal to or greater than $250 must usually be paid in full

Medical Debts

  • FHA: Not considered as debts
  • Conventional: Are considered as debts, but may not need to be paid

If you'd like to talk about qualifying for a home loan, call or e-mail us.  We'd be happy to review things for you.