I always tell my customers that if they can't get a mortgage, they should try to improve their credit score and keep working toward their goal. Now, those who were really close to being approved and who have paid off most of their debt might just need to try again.
FICO has changed its formula for calculating credit scores by lowering how much it penalizes for medical debt. In addition, people who have been carrying bad debt but do eventually pay it off will find that this has less impact on their scores than it used to. This could boost credit scores several points. I'm not a lender, lawyer, or expert on mortgages, but if I had applied for a mortgage in the past year, came close to being approved, but had too much medical debt to make it, I would most certainly try again. I would at the very least call my lender and ask.
Try to remember, as I tell myself almost every day, in the end, the biggest determiner of success is whether or not you have the ability to persevere. Hopefully these changes will help some people who have persevered finally be able to move into their new home!
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