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Recent Medical Collection and USDA and or FHA Mortgage Approval


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6 replies to this topic

#1 Tpelc23

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Posted 26 December 2011 - 08:55 PM

Just wondering what my chances of getting a mortgage are with recent medical collections. I am in the process of trying to do PFD deletes, but what if that is not possible. The dates the service was provided was about 2 years but, the just showed up within the last 6-8 months on my credit report appears.I can pay them all and will, but am hoping for a glimer of hope that we can still get a mortgage. Mid credit score is about 640. Thanks.



#2 Brian B The Loan Professor

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Posted 29 December 2011 - 01:19 PM

Just wondering what my chances of getting a mortgage are with recent medical collections. I am in the process of trying to do PFD deletes, but what if that is not possible. The dates the service was provided was about 2 years but, the just showed up within the last 6-8 months on my credit report appears.I can pay them all and will, but am hoping for a glimer of hope that we can still get a mortgage. Mid credit score is about 640. Thanks.

It will depend on the bank and the underwriter
hard to say for sure

#3 DallasLoanGuy

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Posted 01 January 2012 - 08:09 PM

The rest of the file should look pretty good for this to be allowed..... although many weigh medical collections a little differently.

#4 patrick513

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Posted 12 January 2012 - 11:54 PM

If you are able to pay them then do so, it will give a better general impression of your credit history. The USDA underwriters are forgiving (in some cases) just be aware that you may have a 30 to 90 day waiting period.

I did qualify for the max limit in my area (Florence County, SC) $ 137,100. my wife is a FT student we have 2 daughters (minors) our pre tax income is approx $30,000.

The amount of paper work involved is crazy so get ready, just to start have your last 2 years tax statements, last 2 MOS bank statements and last 4 MOS pay stubs ready. if you get through the pre qual you will get a letter showing you the full amount and a time limit of 45 days to submit all paper work on the home you are wanting to purchase. Its a good idea to have your home / floor plan picked and consulted with your builder or RE while waiting for the pre approval.


Keep in mind that USDA RD states that the home must be "modest" you will NOT get a straight answer on the square footage limit untill you have submitted all this paper work.

After I went through all the trouble I submitted a floor plan for a MANUFACTURED HOME that was 2280 sq ft and I was told that it was NOT "modest" and the max was 1800 sq ft. now keep in mind that I "QUALIFIED" for the max in my area of $137,100 paid all the non refundable fees (land servey 1 acre $500, credit report $32.00 water and soil test approx $ 350) oh and I own the land and have lived on it for 10 years yet still had to have all this done. So a 2280 sq ft MANUFACTURED HOME priced at approx $115,000 (lanscaped and graded lawn permanent brick foundation and storage building included with price) is not "MODEST" in an area where the homes are 2 story and really extravagant.

USDA RD has its issues and its NOT as good as it sounds. If you are willing to pay for a home for 30(+) years you would think that after qualifing for the max and not maxing that out that the square footage would not be an issue. I did ask the million dollar question that if I find a 1800 sq ft MANUFACTURED floor plan for $137,100 would that pass all the requirments. I was told "why you be willing to pay that for a smaller home when you have found one that is larger for a better price"!

I wish all the best of luck and hope someone finds this helpful. ASK QUESTIONS OVER AND OVER AND OVER get whatever you can in black and white and be willing to walk away and do not get set on one home.

#5 Tpelc23

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Posted 10 February 2012 - 10:17 PM

THanks for the information. We only have to do the guaranteed loan. I'm trying negotiate a pay for delete first but before I pay we will apply and see what the lender says. We have will have money to pay them in required.





quote name='patrick513' timestamp='1326430484' post='4605483']
If you are able to pay them then do so, it will give a better general impression of your credit history. The USDA underwriters are forgiving (in some cases) just be aware that you may have a 30 to 90 day waiting period.

I did qualify for the max limit in my area (Florence County, SC) $ 137,100. my wife is a FT student we have 2 daughters (minors) our pre tax income is approx $30,000.

The amount of paper work involved is crazy so get ready, just to start have your last 2 years tax statements, last 2 MOS bank statements and last 4 MOS pay stubs ready. if you get through the pre qual you will get a letter showing you the full amount and a time limit of 45 days to submit all paper work on the home you are wanting to purchase. Its a good idea to have your home / floor plan picked and consulted with your builder or RE while waiting for the pre approval.


Keep in mind that USDA RD states that the home must be "modest" you will NOT get a straight answer on the square footage limit untill you have submitted all this paper work.

After I went through all the trouble I submitted a floor plan for a MANUFACTURED HOME that was 2280 sq ft and I was told that it was NOT "modest" and the max was 1800 sq ft. now keep in mind that I "QUALIFIED" for the max in my area of $137,100 paid all the non refundable fees (land servey 1 acre $500, credit report $32.00 water and soil test approx $ 350) oh and I own the land and have lived on it for 10 years yet still had to have all this done. So a 2280 sq ft MANUFACTURED HOME priced at approx $115,000 (lanscaped and graded lawn permanent brick foundation and storage building included with price) is not "MODEST" in an area where the homes are 2 story and really extravagant.

USDA RD has its issues and its NOT as good as it sounds. If you are willing to pay for a home for 30(+) years you would think that after qualifing for the max and not maxing that out that the square footage would not be an issue. I did ask the million dollar question that if I find a 1800 sq ft MANUFACTURED floor plan for $137,100 would that pass all the requirments. I was told "why you be willing to pay that for a smaller home when you have found one that is larger for a better price"!

I wish all the best of luck and hope someone finds this helpful. ASK QUESTIONS OVER AND OVER AND OVER get whatever you can in black and white and be willing to walk away and do not get set on one home.
[/quote]

#6 Najus

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Posted 11 February 2012 - 07:29 PM

Each persons situation is different so I will only speak from my wife and I experience. We just closed on a USDA loan in Dec. and my wife had 2 medical collections 1 for $800 and the other for $63 which was added to the credit report in the beginning of 2011. We were about to use Whychat's for medical collections but decided to hold off on it unless the underwriter told us it needed to be paid. Well needless to say the only thing we had to do was just write a letter of explanation of how those medical collections came to be.

#7 Tpelc23

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Posted 11 February 2012 - 07:57 PM

Each persons situation is different so I will only speak from my wife and I experience. We just closed on a USDA loan in Dec. and my wife had 2 medical collections 1 for $800 and the other for $63 which was added to the credit report in the beginning of 2011. We were about to use Whychat's for medical collections but decided to hold off on it unless the underwriter told us it needed to be paid. Well needless to say the only thing we had to do was just write a letter of explanation of how those medical collections came to be.




Thanks for sharing. Mind sharing your credit scores?




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