pinkeysas

Collections/Mortage Pre-approval

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My fiancee and I recently sat down for a pre-approval for a mortgage and were told that the 2 items listed our reports as collections would need to be paid BEFORE she could issue us the pre-approval. So in other words we have been pre-approved but she will not "certify" that until those items are paid.

Now paying these items would be no problem, one is for $134 and the other is for $498 and both have been disputed unsuccessfully so I know that they are ours.

However I thought that it was best to wait to pay these until closing as it will drop your scores? I mentioned that to her and she said no can do, she needs them paid before anything else can happen.

Will it really hurt things that badly if we pay them now???

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My fiancee and I recently sat down for a pre-approval for a mortgage and were told that the 2 items listed our reports as collections would need to be paid BEFORE she could issue us the pre-approval. So in other words we have been pre-approved but she will not "certify" that until those items are paid.

Now paying these items would be no problem, one is for $134 and the other is for $498 and both have been disputed unsuccessfully so I know that they are ours.

However I thought that it was best to wait to pay these until closing as it will drop your scores? I mentioned that to her and she said no can do, she needs them paid before anything else can happen.

Will it really hurt things that badly if we pay them now???

What are your scores? You only have 2 baddies? How many good ones?

Maybe it's time to talk to another lender.

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What are your scores? You only have 2 baddies? How many good ones? Maybe it's time to talk to another lender.

She is using our TransUnion scores as the median score his is 631 mine is 647.

I have pretty much all good history I had one item in collections but it was a medical collection for only $203 that I paid last year. The rest of mine is 2 car loans and 3 credit cards that I am all current on.

He has HAD a lot of items in collections that we have been paying off for about a year. One real bad one that was over 120 days past due but we made a settlement payment to them with our tax returns where we settled for 75% of total amount owed and that was with an Original Creditor (Wfnnb/American).

Now he only has left these 2 items one with Midland and one with AFNI Inc.

The only good credit he probly has is that he has been piggy backing on one of my Visa cards for the past 2 years that we pay on time every month.

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She is using our TransUnion scores as the median score his is 631 mine is 647.

I have pretty much all good history I had one item in collections but it was a medical collection for only $203 that I paid last year. The rest of mine is 2 car loans and 3 credit cards that I am all current on.

He has HAD a lot of items in collections that we have been paying off for about a year. One real bad one that was over 120 days past due but we made a settlement payment to them with our tax returns where we settled for 75% of total amount owed and that was with an Original Creditor (Wfnnb/American).

Now he only has left these 2 items one with Midland and one with AFNI Inc.

The only good credit he probly has is that he has been piggy backing on one of my Visa cards for the past 2 years that we pay on time every month.

How soon are you looking to buy? If it's great than 3-4 months, he probably ought to get an orchard card to help his score. If less than that, he probably ought to piggy back on more of your cards.

Regardless, your scores are doing pretty good. I'd talk to other lenders.

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How soon are you looking to buy? If it's great than 3-4 months, he probably ought to get an orchard card to help his score. If less than that, he probably ought to piggy back on more of your cards.

Regardless, your scores are doing pretty good. I'd talk to other lenders.

We are hoping to get into a home within 3 -4 months so.........I will add him to some of my other cards then.

This is the 3rd lender we've spoken two but the only one we actually had pull our scores and ran a preapproval with. When we made the other two lenders aware of the 2 collections and the amounts, they also said they would make us pay the collections before closing as well!!!!!

Is there a certain bank/lender/credit union that you know of that is known to be more lenient?? Like either allowing us to pay at closing or just letting them slid cause of how small $$$ they are????????? Cause so far we're batting 0 for 3.

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We are hoping to get into a home within 3 -4 months so.........I will add him to some of my other cards then.

This is the 3rd lender we've spoken two but the only one we actually had pull our scores and ran a preapproval with. When we made the other two lenders aware of the 2 collections and the amounts, they also said they would make us pay the collections before closing as well!!!!!

Is there a certain bank/lender/credit union that you know of that is known to be more lenient?? Like either allowing us to pay at closing or just letting them slid cause of how small $$$ they are????????? Cause so far we're batting 0 for 3.

Check out naca - www.naca.com

Great rates, no costs (well, $25 for a credit report), not score driven, some minor catches, but might be worthwhile for the rate they offer.

I'd look at their website and go to a seminar if they're in your area.

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Fannie Mae changes it's guidelines last month so on certain approvals no collections or charge-offs (of any amount) have to be paid unless it effects Fannie Mae's first lien position. Get with a mortgage broker or lender who can run your loan through Fannie Mae's automated underwriting system.

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DO NOT PAY OFF OLD COLLECTIONS before financing. It WILL cause your scores to drop.

The LO should submit the loan and then if approved there may be a condition or stipulation that the collections will have to be paid before the loan funds. Pay them off then.

It use to be a common request/condtion/stipulaton, but now is rare for small amounts to matter for a loan approval.

Charles

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