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Shuwatic

Thoughts on qualifying with an old unpaid charge off?

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Well, my husband and I have been working on getting into our first home for over a year. I have mostly just been working on getting his credit fixed. It was very low 500's when we started this journey and I have it up to the mid-high 600's now. Last I checked our broker said his qualifying score is 657 and mine is 770. We had been thinking about getting into a loan under my income alone, so his score wouldn't affect our rate, but that puts our loan at a max of about 200k with our 10% down payment. We are hoping to go just a little higher, at about 210-240k and so here we are trying to figure out the best course of action to deal with his credit. We were told if we can get his score up to 680, if would help with the interest rate quite a bit. But the main issue is, he has an old charge off from a car he co-signed on with his ex that was repo'd in 2008, for about $6000.

 

Anyone know if we might be able to qualify with that charge off? I am considering offering a PFD, and see if we can handle it that way, but I want to make sure we look at all the options. He does have a couple other paid charge offs that I am made the mistake of paying before I found this site (still kicking myself!). So, I am trying to see if we can get those deleted somehow, as well.

 

 

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That is a larger amount - some banks will allow it however it may come up

I would be prepared to pay it if asked by an underwriter but not before since you may get through without having to pay?

It is one of those things you wont know for sure until you try

B

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what is statute of limitations for collecting that debt in your state?

 

if outside SOL..... some lenders will still approve without requiring this be paid since it will not be able to affect title

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what is statute of limitations for collecting that debt in your state?

 

if outside SOL..... some lenders will still approve without requiring this be paid since it will not be able to affect title

 

My understanding is that the SOL for collecting on the debt is 4 years. Fingers crossed that you're right, in our case! That gives me hope, for sure. Our broker gave us basically the same advice... that if we are considering paying it, we might as well wait and see if we can get through underwriting without paying, and worst case is that we have to pay it off.

 

My only hesitation is that, if we are going to end up paying it off, I want a PFD... not just a paid charge off. I worry that if the underwriter ends up forcing us to pay it, to close, that we won't have time to work on a PFD, at that point. Will paying it off re-age the SOL for reporting for 7 more years? Or does it still fall off in 7 years from the first delinquency?

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what is statute of limitations for collecting that debt in your state?

 

if outside SOL..... some lenders will still approve without requiring this be paid since it will not be able to affect title

 

My understanding is that the SOL for collecting on the debt is 4 years. Fingers crossed that you're right, in our case! That gives me hope, for sure. Our broker gave us basically the same advice... that if we are considering paying it, we might as well wait and see if we can get through underwriting without paying, and worst case is that we have to pay it off.

 

My only hesitation is that, if we are going to end up paying it off, I want a PFD... not just a paid charge off. I worry that if the underwriter ends up forcing us to pay it, to close, that we won't have time to work on a PFD, at that point. Will paying it off re-age the SOL for reporting for 7 more years? Or does it still fall off in 7 years from the first delinquency?

 

Your loan officer needs to run this by their underwriter before you get too far along with that lender.

That can be done.

No need to pay this off to close

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