FHA and HUD may drop your Credit Score, Careful!

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New FHA guidelines, that start on April 1st, may hurt your credit scores!!  New FHA guidelines will require any home buyer that has collection accounts that total over $1000.00 to payoff the accounts or start a repayment plan and have at least a 3 month payment history on the repayment plan.  AND, this includes medical collection accounts which were often "ok" when it came to a mortgage application.

Unfortunately, if you payoff a collection account or start a repayment plan, your credit score is going to drop like heavy brick.  This is a very tricky situation for homebuyers to work thru and getting proper guidance is key.  Also important, if you plan to get into the home market... get your credit analyzed NOW, even if you aren't getting into the market for several months.  The more time you have to work on collection accounts, the more options you will have available.

If you are in the position of having collection accounts that total more than 1000 and want to buy a home... make sure you get professional credit advice.

Ken Pederson
FAIRWAY Independent Mortgage
Mortgage broker in Lancaster
nmls: 134943