Can unpaid doctor’s bills keep me from getting a mortgage?
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The mortgage officer told us that because of two unpaid small doctors bill my wife has on her file he can’t approve us. They are from 5 years ago, and my wife’s score is well above the 640 required minimum.
You need a clean report these days to get a mortgage
People aren’t aware that Fico score is not everything. Especially these days, and certainly with mortgage applications.
Your Fico score is important, but it’s only a small part of the lending decision. Mortgage companies today require a clean credit report.
Unpaid doctor bills usually go to collection. From there they are reported to the credit bureaus and find their way onto your credit report as derogatory items.
While up to 2010 a credit report with one or two derogatory items would be considered acceptable, today lenders expect a clean report for a standard mortgage approval. Your wife needs to resolve these items if you want to get a mortgage.
Contact the collection companies and either pay in full or negotiate a settlement. You don’t need a “pay for delete” settlement, which may be very hard to get. A “Paid” or “Settled” status with a zero balance will do. It won’t improve her score, but unless you resolve these derogatory items you don’t stand a chance.
Other factors that go into the mortgage decision are: stable minimum 2 year work history, salary, debt to income ratio, other assets, down payment and closing costs.
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