Call me and we can put together a game plan.
Your credit score will take a hit once you pay off these collections. There is a way to structure your purchase loan so you can buy this home now with medical collections & your current score.
Please feel free to contact me directly if you have any further questions, I'd be glad to help.
All the best,
Roswell Moore, CMPS
Certified Mortgage Planner
We are a Direct Lender, Mortgage Bank where we originate, process, underwrite, fund, AND SERVICE our loans, in-house, with FHA (starting at a 580 score AND still only 3.5% down), FHA Streamline loans (NO minimum credit score, NO appraisal required) Go Green rehab loans, HomePath, Investor Friendly (10 financed properties), VA, USDA, Jumbo, Conventional, plus, we allow Escrow Hold-Backs!
Feel free to contact me direct.
your score is fine and $1400 in collections is also ok as long as there is no judgements. You would qualify for an FHA loan as long as you have verifiable rent paid on time past 12 months, two year worth of work history (not all at once place either)
If you would like to start the approval process you can reach me this weekend during the day.
Sr. Mortgage Consultant
It's best to get to all 3 scores being above 680 - more programs will be available to you, especially when buying a 2nd home (on the principal residence the banks are a little more flexible).
With medical collections - you can either "settle" - by maybe halfing the balance, paying the halfed balance at once, and get it in writing, specifying that the creditors either won't report the collection activity, or they will as "paid in full, or paid as agreed".
Or, you can pay the whole amount off gradually, again - getting this in writing, with reporting to credit agencies described as above.
FHA programs, f.e. now (since April 1, 2012) require all collection debt to be paid off down to $1,000.
Being at lower than 30% debt on all other available credit lines will help also - with your scores coming up by a lot.
If you have your 3 credit agencies report - make an appointment with a reputable mortgage professional - so that you could learn more on how to get your scores up.
Hope this helps,
Beachfront Realty, Inc.