will lender look over a debt over two years? (mortgage broker, credit score)

[nickchairsmith]

I've had a couple of ppl tell me if i apply for a mortgage and have a debit under a $1,000 they don't worry about it, the lender.
They said if you have a debt greater than 2,000 The lender just calculate the monthly payment using 5% of the outstanding balance of the collection and include the monthly payment in the your debit to income ratio. how true is that??

[Atlwarrior]

Doesn't sound true at all. I had to payoff everything, and explain anything that was charged off.

[ElleKaye]

Originally Posted by Atlwarrior

Doesn't sound true at all. I had to payoff everything, and explain anything that was charge off.

This was my experience as well.

OP, I don't know anything about the loopholes you mentioned, but I would not bank on them overlooking a debt that's only two years old.

[Caltovegas]

Talk to a mortgage broker. Here is a great source for information.

Mortgage Professor: Standard and Reverse Mortgage Guidance

[MikeHonchoATL]

A sane person wouldn't loan money to someone who has recent history of inability or unwillingness to fulfill their debts. Why would a bank do the same?

[Atlwarrior]

Originally Posted by MikeHonchoATL

A sane person wouldn't loan money to someone who has recent history of inability or unwillingness to fulfill their debts. Why would a bank do the same?

Oh please, especially after tax payers bailed big banks out. Furthermore so called sane people file Chapter 7 Bankruptcy all the time. Even Trump has used bankruptcy and could possible be president. Take your grandiose attitude and dump it.

[atltechdude]

Originally Posted by nickchairsmith

I've had a couple of ppl tell me if i apply for a mortgage and have a debit under a $1,000 they don't worry about it, the lender.
They said if you have a debt greater than 2,000 The lender just calculate the monthly payment using 5% of the outstanding balance of the collection and include the monthly payment in the your debit to income ratio. how true is that??

The debt to income ratio will not be the long pole in you getting a mortgage, the fact that you have a collection will be.

[atltechdude]

Originally Posted by Atlwarrior

Oh please, especially after tax payers bailed big banks out. Furthermore so called sane people file Chapter 7 Bankruptcy all the time. Even Trump has used bankruptcy and could possible be president. Take your grandiose attitude and dump it.

Nope, I despise Trump but he's absolutely right. The fact that some Wall Street bankers were irresponsible does not give everyone license to be.

Recent collections will mean you credit score is in the ****ter. You will have a hard time obtaining a mortgage if that is the case, and if you do successfully obtain one, you will pay a higher interest rate.

I'm applying for my first mortgage soon. I've kept my credit spotless and now score over 800 for just this reason.

If you want to borrow hundreds of thousands of dollars, it helps substantially when you can show that you were responsible in repaying smaller debts. No one has a right to obtain a loan.