I was curious to know with a score in the mid 500s and $25K income with a handful of degrogs that are unpaid.... are there any sub prime motgage lenders who give loans when the chargeoffs/derogs are still unpaid? I am 34, never bought a home before. My other half is in the same boat. 32, low 500 fico, native american, preschool head teacher (masters degree in early childhood)$45K income and many derogs from the late 90s from divorce that keep getting resold and appear newer when you look at the file. Will all lenders insist upon these derogs being paid in full? I know we are talking higher interest of course, but are willing to pay higher interest. we pay 1500 rent as it is right now. if that isn't equal to paying a high interest i don't know what is. Any thoughts are appreciated.
How old are the unpaids, that will matter. FHA will want them paid, but you may find a subprime lender to do a 100% mortgage with them unpaid, but you'll need a 580 mid-score, at least.
in my experience, most lenders have some sort of cap, ie, they make you pay them if the amount is over $250 per TL or $1k total. can you offer a settlement in exchange for deletion?
If I were you I'd follow the direction of many on this board and work on your score. If a collection is showing many times...this is your best bet. Most sub prime investors will allow 1K in collection account and the age of them is a factor. I'd dispute and validate...most times those CA's will have to delete. Give yourself 3 months to work on your credit. You'll be amazed at what you can accomplish. Most subprime lenders do want a 580 mid on the primary borrower to do 100%. I do know of an investor that will do 100% with a 525 mid score...ALL collections must be paid at closing though. Having open lines (can be open or paid) that are 24 months old with 1 having at least $2,500 or greater limit opened for 12 months or more are some things some lenders look for. Remember that when you are deleting trade lines. Start your cleanup and then GO for it!!!m Good luck!
Only other thing I would add is the mis conception that FHA and VA require that all collections be paid. I have had, in fact, several loans this year that had 5+ collections still outstanding on the FHA loan. While this is not always the case, often times you can get away without paying them.
