Posted on: 12th May, 2012 12:04 am
Hello. Both me and my spouse are preparing to buy our home as soon as we finish saving up for a down payment and closing costs. We have a good savings and an okish credit score. But there are certain old collections mentioned in our credit reports. I plan on trying to remove as much as I can but I was wondering if old debt is a major problem when in comes to FHA loans? All of these debts are at least 3 years old from the DOFD.
Hi Weldam,
It is always suggested that you pay off your old collections accounts before you apply for a loan. Nevertheless, as 3 years have passed, you may have to provide an explanation for those accounts to the lender.
Thanks
It is always suggested that you pay off your old collections accounts before you apply for a loan. Nevertheless, as 3 years have passed, you may have to provide an explanation for those accounts to the lender.
Thanks
Hi Weldam,
Old debts which are less than 2 years or 2 years old can be a problem while getting a new mortgage. However, as your debt account is 3 years old, it may not create a big problem for you. But it will always be preferred by the lender if you pay off the debt account in full.
Old debts which are less than 2 years or 2 years old can be a problem while getting a new mortgage. However, as your debt account is 3 years old, it may not create a big problem for you. But it will always be preferred by the lender if you pay off the debt account in full.