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While some collection agencies will agree not to report medical collection accounts that are paid off immediately, others refuse to do so. And some bill collectors will use the threat of credit report damage to try to get patients to pay up, even if the bill itself is disputed.
Here are some interesting myths and facts about medical collections!
Myth: As long as I am making payments on a medical bill, it can't be sent to collections.Fact: Making payments won't necessarily keep the bill out of collections. Even if you are making regular payments, they need to be a certain amount to prevent being turned over. Of, if you are under a payment arrangement but are late (even by just a few days) your bill may go to collections. If you leave any balance unpaid, there's a good chance it will go to collections.
Myth: When it comes to credit scoring, medical accounts are treated differently than other types of collections accounts.Fact: The credit scoring formula does not distinguish between medical and non-medical collection accounts. All collection listings are derogatory and will affect your credit score the same way as other collections. Some creditors have been known to be more lenient when it comes to medical debt, even though the credit scoring formula will not.
Myth: I'll need to pay off medical collection accounts to improve my credit.Fact: Paying your bills is the responsible thing to do, but don't do it expecting drastic changes to your credit score. Collection accounts damage your credit score, paid collections aren't as detrimental but they're still negative. The negative listing can stay on your credit file for up to 7 years.
Bottom line, if you want to be ready to buy a home or refinance, call me and I'll help you with credit, loan type and walk you through it.
Despite the regulations imposed by the Truth-in-Lending/RESPA Integrated Disclosure (TRID) rules and disclosure forms in October 2015, some homebuyers still say their final closing costs caught them by surprise. Some appear to have been unaware that closing costs were even required.
ClosingCorp, a provider of real estate closing cost data and technology, has released results of a new on-line survey that explored whether TRID has helped consumers better understand the closing costs associated with purchasing a home. The survey, commission by ClosingCorp and conducted by Wilson Perkins Allen Opinion Research, was conducted in early January, among 1,000 adults nationwide who had purchased a home during the 12 months ended on January 1, 2017.
When asked what surprised them about their closing costs, 31 percent of homebuyers were not surprised at all about their closing costs because their loan estimates and closing fees matched. However, 35 percent expressed surprise that their costs/fees were higher than expected while 17 percent said they hadn't expected they would be required at all. (sidenote: how does that even happen?!)
The top five closing costs that most surprised homebuyers were:
1. Mortgage insurance (24 percent)
2. Bank fee/points (23 percent)
3. Taxes (22 percent)
4. Title insurance (21 percent)
5. Appraisal fees (20 percent) and fees paid by the buyer vs. seller (20 percent).
Fifty-eight percent of respondents said their initial loan estimate had changed or been revised prior to closing. Sixty-seven percent of those saying their estimates were changed were residents of the Northeast and 63 percent of had home values between $500,000 and $1 million.
Buyers said the fee estimates most frequently changed were closing costs (12 percent), insurance costs (6 percent) and taxes (5 percent).
The most common reason homebuyers cited for revisions to their closing costs was changes to the loan based on what they qualified for (31 percent). Other reasons given were inaccuracies in the estimate (27 percent) and a change to the loan because of a homebuyer request (23 percent.)
The majority of respondents, 72 percent, said their loan estimates and closing disclosures were delivered electronically. ClosingCorp pointed out that was also the percentage of all respondents falling into the Millennial age group.
Half of all homebuyers said they selected had picked the title company involved in their closing. Of those who did not, 35 percent said their real estate agent had selected it for them. The report said this suggests that agents, as the homebuyers "first touch point," have a lot of influence on their customers.
Bob Jennings, chief executive officer of ClosingCorp said, "As more and more Millennials become first-time homebuyers, TRID or Know Before You Owe has made it easier for them to understand the costs and fees they'll face at closing. Yet there are still surprises during the closing process. Lenders and realtors need to keep educating borrowers on the costs and fees associated with closing to alleviate surprises."
"In addition, our survey shows that 52 percent of lenders were 'off' on their initial loan estimates, so there's significant room for improvement. Using automated fee technology can help prevent lenders from under- or over-estimating closing costs and mitigate the risk of costly variance issues post-closing."