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beachdreaming777

Collection and Charge Offs when buying a home

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My wife and I are wanting to buy a home but we have collections and charge offs on our credit. We are trying to raise our score to 620 for a VA loan. Just trying to get a game plan. Will we need to pay these off before we can buy? They are all over 2 years old. 

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there are (at least) two issues for you.

 

first, in general no UW for a normal mortgage will let you close with unpaid COs.

 

second, paying old, out of SOL debt will not necessarily raise you score. What is the SOL in your state for this type of debt?

 

additionally, 50% of credit repair is adding high quality lines.

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Posted (edited)

I would also add that many people are attracted to VA loans because of the low/no down payment requirement.  

 

If this describes you, please consider the precarious position you will be in with limited savings in case you need a major plumbing or roof repair, or if you need to sell shortly after you buy.  It will take time before you even have enough equity to pay the realtor commission.

 

Also, even if you don't have to pay PMI, the funding fees on VA loans can be exorbitant.  

 

Best wishes on your endeavor.

 

Edited by cv91915

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14 hours ago, cv91915 said:

I would also add that many people are attracted to VA loans because of the low/no down payment requirement.  

 

If this describes you, please consider the precarious position you will be in with limited savings in case you need a major plumbing or roof repair, or if you need to sell shortly after you buy.  It will take time before you even have enough equity to pay the realtor commission.

 

Also, even if you don't have to pay PMI, the funding fees on VA loans can be exorbitant.  

 

Best wishes on your endeavor.

 

This.  Plus based on what you told us in the another thread, you are coming to a decision point on a vehicle that you currently don't have a solution for.

 

The best thing you can do is take a step back and assess, truthfully, where you are right now financially.  Look at both your monthly budget (income vs. expenses) as well as your assets vs. liabilities.  Then you can truly see if you are ready for the financial strain home ownership can cause.  I am guessing if you are honest about it (or if an unbiased third party were to do it), the answer would be no.

 

There is more to getting a mortgage than credit scores.  You also need to have the income to support it and your other obligations, as well as the money for closing costs, plus in your case you need to handle the collections as well.

 

Use the advice from your other thread on dealing with the collections.  Then take care of the vehicle situation (wanting to buy a home is more reason for getting a sensible used car), then when you have some savings built and have raised the credit scores, you can look at things like buying a home.

 

Not trying to be mean, just being honest.

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1 hour ago, CTSoxFan said:

This.  Plus based on what you told us in the another thread, you are coming to a decision point on a vehicle that you currently don't have a solution for.

 

The best thing you can do is take a step back and assess, truthfully, where you are right now financially.  Look at both your monthly budget (income vs. expenses) as well as your assets vs. liabilities.  Then you can truly see if you are ready for the financial strain home ownership can cause.  I am guessing if you are honest about it (or if an unbiased third party were to do it), the answer would be no.

 

There is more to getting a mortgage than credit scores.  You also need to have the income to support it and your other obligations, as well as the money for closing costs, plus in your case you need to handle the collections as well.

 

Use the advice from your other thread on dealing with the collections.  Then take care of the vehicle situation (wanting to buy a home is more reason for getting a sensible used car), then when you have some savings built and have raised the credit scores, you can look at things like buying a home.

 

Not trying to be mean, just being honest.

Agree, agree, agree.

 

When you have a lot to tackle, it helps to prioritize.  

 

Can't speak for anyone else, but I can't do an outstanding job at any one thing when I'm trying to solve nine things at once.

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