YOU DON'T HAVE TO PAY OFF YOUR COLLECTIONS before you get your loan closed, anyway. Lenders do not require all collections to be paid, so using your cash to pay an old collection may actually hurt you by making an old issue a current one.  Sounds crazy doesn’t it?  Sorta like taxing coal companies into bankruptcy when 90% of Ohio’s electricity is coal generated.  I guess my brain is just too small to understand complicated stuff.  My advice?  Get your mortgage loan closed, then pay off any collections.