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Are old debts are a major problems?

Posted on: 12th May, 2012 12:04 am
Hello. Both me and my spouse are preparing to buy our home as soon as we finish saving up for a down payment and closing costs. We have a good savings and an okish credit score. But there are certain old collections mentioned in our credit reports. I plan on trying to remove as much as I can but I was wondering if old debt is a major problem when in comes to FHA loans? All of these debts are at least 3 years old from the DOFD.
Hi Weldam,

It is always suggested that you pay off your old collections accounts before you apply for a loan. Nevertheless, as 3 years have passed, you may have to provide an explanation for those accounts to the lender.

Posted on: 12th May, 2012 01:03 am
Hi Weldam,

Old debts which are less than 2 years or 2 years old can be a problem while getting a new mortgage. However, as your debt account is 3 years old, it may not create a big problem for you. But it will always be preferred by the lender if you pay off the debt account in full.
Posted on: 13th May, 2012 08:53 pm
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