Got my pre-approval letter for mortgage...question about old debt?

Does this statement from my letter mean I have to pay off an old debt before I can actually get the loan? The mortgage consultant I spoke to did not say I had to pay it off, just that it was on my credit report.

Mortgage Services to order a credit supplement in order to verify the following account is erroneous

previously paid, or you must qualify with the monthly payment.Borrower:xxxx;Creditor:MERCANTIL... ADJMNT BUR;Account Number:81x02080;Balance:4

Got my pre-approval letter for mortgage...question about old debt?

You don't have to pay it off if it is an old unpaid account. It will stay on your credit report for at least 7 years from the last time a collection of it was filed. This will decrease your credit score, causing you to get loans with higher interest rates.

Got my pre-approval letter for mortgage...question about old debt?

I recognize that verbage. It looks like you are dealing with PHH mortgage or a subsidiary that uses PHH through its Private Labeling. I worked there for 10 years. That wording is a %26quot;boiler plate%26quot; condition (meaning automatic, the computer puts that on there) It shows up any time your consultant marks a debt that showed up on your credit report as %26quot;inaccurate%26quot;. Have no worries, as long as it is truly inaccurate, you will have no problems. The Mtg Co. will order a special credit supplement and verify the status of that debt. But they are covering their back side and inferring that if the debt can not be verified as inaccurate, they will include the payment into their calculations of how much house payment you can afford.

Now, with all good intentions, and while this is NOT a solicitation, I strongly encourage you to look at some other lenders. I had worked for this company for years, they do not offer the most competitive rates, by far. Oh, they are nice people, and they make an intimidating process a little easier. They have some good points, but I have to suggest, you could do a lot better. Feel free to contact me if you would like to talk more about what to look out for.

Got my pre-approval letter for mortgage...question about old debt?

No it is not necessary to pay this off. I am a Mortgage Advisor/Loan Officer with over 10 yrs in the business - I am also a Junior Underwriter so have no fears you are fine unless there is more to the credit report than you have listed you are just fine.

Also note that Pre-Approval means absolutely NOTHING until all your documents are in with the Lender. I am a Wholesale Lender in North Carolina so if you have ANY questions, comments or concerns feel free to contact me. Just see my sites below for further info