Short answer
Judgments and liens, yes, generally. For conventional loans, Fannie Mae requires delinquent debts that can affect the home's title or your equity, such as judgments, tax liens and contractor liens, to be paid off at or before closing. Ordinary collection accounts and charge-offs depend on how the loan is underwritten: the automated system may not require payoff, and on manually underwritten loans small balances and medical collections may not need to be paid.
Why do judgments and liens have to be paid?
A judgment or lien can attach to real estate you own, which could put it ahead of or alongside your new mortgage. Lenders need a clear first lien, so those claims are paid off at or before closing, often from your closing funds. Your title search will turn up recorded liens in New Hampshire.
What about collection accounts?
For loans run through Fannie Mae's automated underwriting, the system's findings decide whether a collection or charge-off has to be paid. For manually underwritten loans, non-medical collections and charge-offs must be paid unless the balances are small, and medical collections aren't on that payoff list. FHA, VA and USDA each have their own rules; for FHA, see FHA loans with collections, charge-offs or judgments.
Should I pay an old collection before I apply?
Not always. Paying an old collection doesn't always raise your score, and some newer scoring models treat paid collections differently. Ask Tom to look at your credit report first, so you spend money where it actually helps. See credit and your mortgage and VantageScore 4.0 for mortgages.
What if the collection isn't mine?
Dispute it with the credit bureau and the collector. Errors on credit reports are common, and fixing one can take a few weeks, so start early. See what to do after a denial.
Sources
Checked November 2, 2026. Rules and dates change, so confirm current details before you rely on them.
General information only, not tax or legal advice. Program availability, eligibility and terms vary by lender and are subject to change and to underwriting approval. Not a commitment to lend.