FHA mortgage with paid collections?
hi! I recently have been planning to start the mortgage process by feb-mar 2012. I started to clean up my credit and paid off 5 of 6 collection accounts. All the collections are over 2 years old except one. I am paying this last one off in 2 weeks. I paid the first 5 and my scores jumped, i opened two credit cards for building purposes, dont worry, both cards have a balance of $30 each and with high limits. I know one score is 650, second is 629 and 605.What are the FHA guidlines for past collections if they are paid off?....Btw, i was looking at my fico scores from myfico, not fako, also a mortgage company did a free pull and told me my scores by jkelleysroad77 from Portland, Oregon. May 5th 2011
Chris Gummerson (cgummerson11)
#397 ranked lender in California - 648 contributions
You would need a 640 for most lenders using FHA. Collections should be paid to avoid any issues with underwriters. Keep your cards active, not to exceed 40% of the credit limit. You will also need 2 years of stable employment that can be verified. Keep in mind that many people write off expenses, such as 2106 expenses or business expenses. This helps avoid taxes, but will lower your income for qualifying purposes.
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