pay off collection before taking loan

Guest 0.10 Dollars($)

I met a lender for a loan and he insisted me to pay off the collections first. Do I need to pay off my collections always to get a loan?

jameshogg · Posted: Sat Jul 22, 2006 4:49 pm Post subject:

Hi,

May be that is the requirement of the individual lender. Not all lenders will make you pay off all your collections first.

Some will require you to pay off if your collections are over a certain amount. Non-conforming lenders will not require you to pay off any of your collections. You need to shop around with different lenders and check if all have the same requirement.

If you find it difficult to get approved for a loan with a conforming lender then deal with a non-conforming lender.

blue · Posted: Sat Jul 22, 2006 4:53 pm Post subject:

Hi,

I would like to add one more thing. You should not try to pay off any old account in collection unless that is a specific requirement of your mortgage professional. Paying off old collections can lower your score.

Blue

ckalvesmaki · Posted: Sat Jul 22, 2006 5:40 pm Post subject:

Conforming guidelines will allow up to 5k in open collections.....what type of loan are you applying for?

Guest 0.10 Dollars($)

It depends on what your goal is and if you have the money to do it. Most times we don't have the money to pay off debts or we would have... then if might be better to do the loan pay off debt and then in a few months get a good rate and lock in for the long run.

colin · Posted: Wed Jul 26, 2006 12:16 pm Post subject:

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