how concerned with medical coolections should I be?

[kimmie]

Hello,

 

I am working on our credit so that we can purchase a home, most of our credit is medical, I am hoping to buy a house in the next 6 months, and if they will not be a factor for a FHA loan, I would like to concentrate on the other accts, any advice?Thanks in advance!

[fla-tan]

Kimmie

 

Generally speaking, FHA does not allow any open collections or chargeoffs. You will either need to pay them off first, or if you try for an FHA mortgage and are approved, you will be required to pay at or before closing. Conventional mortgages are pretty much the same. Non-conforming/subprime mortgages normally will ignore medical collections as they are not considered consumer debt. You will pay a bit of a higher rate, but if you are trying to go with a high LTV, then part of the offset would be no MI. What does the rest of your credit look like?

 

I hope this helps you some.

 

 

fla-tan

[kimmie]

Thanks for responding, well I have a retail card only opened since December, never late, one closed acct by credit grantor, paying as agreed, and some paid charge offs. In december when I started the credit task scores were TU-562 now591, ex 505 now 589, and exp 535 now 562, I know they are low, but I am being optimistice I can get them were I want them in next 6 mos, worst case, pay now worry later! Forgot to mention ex husband is responsible for children's medical bills, one mortgage co told me the underwriters would look at divorce decree, and i would not have to worry about it is this accurate info?

[fla-tan]

Kimmie

 

It sounds like your credit is very weak (as in limited), however, you can also use non-traditional types of credit such as utilities, cell phone etc to provide the required credit history. You can also, in some instances, use rent payments as well. Some lenders will accept the divorce decree if it shows that exDH was responsible for paying medical, though some of them may not as well. There may also be some other options so keep moving forward.

 

 

fla-tan