Does a Collections Account Affect My Mortgage Approval?
The collection reflects hardships. Conventional loans are those loans that are backed by Fanie Mae and Freddie Mac which are sort of Govt agencies that are backing your mortgage and your credibility and ability to repay the mortgage in time. Should you default or we have a mortgage crash like the one we saw in 2008. Being backed by Govt agencies, these loans are preferred by investors who buy and sell our mortgage called Mortgage Backed Securities every day.
FHA Mortgage Guidelines On Collection Accounts
Most of the loans, if you have a mortgage size of 424k, is typically but not necessarily backed by Govt agencies. The advantage to the borrower is that in the event of any calamity if the Govt announces any hardship plan for borrowers. You would not qualify for it unless your loan is backed by Govt agencies.
Typically Banks would want the collection to be settled before the mortgage is funded. There may be exceptions but depends upon the bank to bank. Ideally, they all want no collection account at the time of funding of the mortgage.
Updated FHA Mortgage Guidelines On Collection Accounts
FHA or Federal Housing Administration is yet another Govt body that allows for more lenient guidelines while providing govt backing to borrowers mortgage. FHA does allow ignoring collection account particularly Medical collection but that too only up to certain amount and that changes from banks to banks as well.
No comments:
Post a Comment