Buying a house after Bankruptcy

Our Ch. 7 was cleared in Nov. 2003. We are currently saving for a down payment for a home. We have read that we will need 20% down and that our ch. 7 will have to be cleared for 2 years. Is this true? We currently have not opened any credit cards, and our cars are paid for. We are making monthly payments on our student loans.
What steps do we need to do to ensure that we can get approved for a house loan?

Our Ch. 7 was cleared in Nov. 2003. We are currently saving for a down payment for a home. We have read that we will need 20% down and that our ch. 7 will have to be cleared for 2 years. Is this true? We currently have not opened any credit cards, and our cars are paid for. We are making monthly payments on our student loans.
What steps do we need to do to ensure that we can get approved for a house loan?

Keep doing what you're doing. It would also be useful each of you to open upon one credit card account, and make the monthly payments to boost up your credit scores. Lenders want to see that you have a current payment history and a mininum credit score before they'll typically touch you.

Good Luck!

Sara,
you need to pull your credit history from all 3 CRAs and make sure everything is correct. If there are errors, you need to dispute them.

After all errors are cleared, you want to apply to a credit card, or if you have a friend or relative who can add you as a "authorized user" on their account, within 6months that should help boost your FICO score up.



Todd, I've sent you a PM, but haven't received a reply, can you check your PM box please.

Sara,

First off, good thing you have taken an initiative in getting yourself financially stable again.

Now, as far as purchasing a home after bankruptcy, it is true that banks will not let you do that for 2 years. However, with non-conforming lenders, you qualify for purchasing a home 1 day out of bankruptcy. Now as far as a down payment, depending on your FICO scores, you can qualify for a 85% all the way to a 100% financing loan. The programs are very competitive as non-conforming loans have been showing less risk in the past few years. Currently the rates and programs are better than that of conforming loans. Your dreams of owning a home are closer than you can imagine! Good luck!

Glad to help,

Ali Razavi

Sara:

There seem to be a misconception that after filing BK, you have to wait 2 yrs before you are able to get a mortgage. This is often not true. There are lenders (you just have to know where to look) that will gladly give you a mortgage 1 day after your discharge.

If you have a 600 scores and above, able to go FULL DOC (proof income that is), you can get 100% LTV. These lenders will even allow the seller to help you with part of the closing cost too.

Same thing if you have had a foreclosure in your history. The key is 600 FICO and above and ability to proof income.

If scores are below 600, you are looking at 80% LTV.

So there definitely is life after BK. Clean up all the wrong info onthe report, re-establish with a couple of credit cards, even if they are secured, they help build those scores back up.

JJ

Sara,
Even though you have a 500 fico score you can still get a loan for a home for a 80 LTV or if you have a 580 fico you can get a 100 % LTV all you have to do is to get a good Loan officer who's willing to help you and shop around and get a better interest rate.

Trish

I want hear from someone who has done it. My scores are 630 and i have major equity. We are out of land in South Florida and home prices have more than doubled in four years. I paid 86900 for our townhome in 2001 and they are now going for a little over 200000 and take less than a day to sell. People are scrambling to get anything that they can.

My coworkers home in Davie was 210000 in 2001 and the neighbors house which is not as nice as his just sold for 400000 in less than a week.

But what are your experiences. I have never been late payments on the Mortgage.

Jambala,
Can you give some of your secrets away, what companies are willing to finance under those terms? Were does one look?

now is a great time to purchase a home. If you are paying your student loans on time you could be eligible for as little as 5% down with great rates. As mentioned above, it would be best to re-establish with a low balance credit card but also keep in mind that there are steps you can take to make your credit score skyrocket. One example: open a credit card (secured or unsecured) but whatever balance you charge, make sure you pay it off each month by or before the due date. Visit http://www.bankruptcy-library.com for more credit tips.

So how hard is it to get your FICO score above 600 after a Ch. 7? Realistically, if you do everthing right, how long would it take? And what rates would you qualify for? (ie: if the market is at 6% fixed 30 yr, could you qualify for 6, 7, 8%?)
Thanks

Sara,

I worked for a mortgage company for 5 years which specialized in servicing first-time homebuyer loans which banks all over the country originated through state housing finance authority programs. Every state in the U.S. has a state housing finance authority which provides funding for mortgage programs for first-time homebuyers (among other programs). These programs have below-market interest rates, low downpayment requirements (some offer substantial downpayment assistance) and the credit standards are not too harsh. You can obtain an FHA loan through one of these programs two years after your bankruptcy is discharged (as long as you've re-established your credit). Go to http://www.ncsha.org/section.cfm/4/39 for a listing of state housing finance agencies.

Hope this helps!

Laura

But who has actually done it with a score of around 600. That is the person i would like to hear from.

Robivi, Sara and anybody looking for info on refinancing or buying a home after bankruptcy. I am a mortgage banker located in NY and do financing for homeowners in over 38 states nationwide. I have closed many loans with people after bks including my own refinances. With a 600 score in the sub prime market your are looked at as A+ borrower, and with as much equity in your home as you say you anybank should be fighting for that loan and getting you the best interest rate around. I recently closed a loan with a borrower just out of bankruptcy with a 580 score and got them 7.5% 30 year fixed which dropped there interest 1.5% from what they originally had. I deal with over 100 diffrent banks and am myself a banker so if you need anymore information on this or want a free credit check and report with consultation on your next move to securing a financially sound future contact me at:

Mike Armella
Senior Mortgage Banker


Good luck to all contact me anytime i am available 24/7.

True. If you can keep a 580 score through your bankruptcy, or build up to that after the BK, you can qualify for 100% financing very quickly, if not immediately. If your scores are lower, you'll need a downpayment. As a national loan officer, I work hard to help you through all the options available to you and explain in human language what might be in your best interest, given your needs and circumstances.

Also, some tips to keep in mind. If you are facing, but have not yet filed bankruptcy:

1. Keep some open lines of credit, or loans THROUGH your BK. You don't have to include EVERY account in your BK. This will help you keep a better score, so that rebuilding credit won't be as difficult. For example, you have a car. It's the only account you've always paid on time. DON'T include it in your BK. Keep the car. Continue your excellent track record and your scores will stay higher through the BK. Applying for credit or a home loan will be much easier then.

2. You've heard it a thousand times. Get a secured credit card. Preferably one that reports to ALL 3 agencies and one that reports as UNSECURED. Use it! Pay it off every month ON TIME, EVERY TIME. I'm currently researching some of the best cards that meet this criteria. I'll have it on my website soon.

There are a few more things you could/should do, but these two will help you get back up after a BK.

I am a lender as well as a mortgage broker. I have every program in the book available for getting financing for bad credit situations. I shop several other nationlenders for you with just ONE credit pull. This means you don't have to shop and destroy your credit further by having everyone in the world pull your credit. Despite popular misconception, almost every credit report I look at says "score was adversely affected by credit inquiries."

Best of luck!

I Purchase A Veh In Feb Last Year With The Understanding That It Was To Be Reported To My Credit Now Im Trying To Buy A Home And Its Not Listed I Called The Car Dealer And They Said It Cost To Much Money To Buy The Software Now And They Will Give Me A Letter If Needed ...i Have Two Small Credit Cards And That Is It ...how Can I Get My Scores To Go Higher? And Will That Letter Help

There are tons of used car dealerships that specialize in subprime loans, that don't report your account and your payments to the CRA's. Just a note to others, if you decide to use one of those your job is your credit type of dealerships, ask them up front whether or not they report your account and your payment history to all three CRA's. They should also be able to provide you an answer in writing.

But to answer your question, a letter from the dealership isn't going to boost your credit score. But it may help towards getting you a mortgage. Also look into getting a copy of one years worth checks that you used as payment for your car note. This payment history could also work in your favor. Beside this and other forms of ontime payment histories, all you can do is continue to use and make prompt payments towards the credit cards you currently have - and allow time to take its course at increasing your credit score.

Another thing you want to consider doing if you already haven't is getting a copy of your credit report from all three CRA's and removing any descrepancies that may be on them. Doing this will also help at increasing your credit score(s) too. Aside from everything I've wrote, sit down with a few experienced mortgage specialists, to find out what you actually need to have done to qualify for a mortgage with thier organization or from thier end clients.

Good Luck!

THANK YOU ONCE AGAIN TODD :cool:

Wow, this is my first time on this board, lots of great information so far!

I have many questions :confused: !

My husband and I officially filed for Ch 7 in April, but it was discharged in July, so, which date do lenders go by, file date or discharge date?

Anywhoo......I just ran both me and my husbands credit report. His FICO Score is 610, mine is 570, there are 2 mistakes on mine showing I still owe balances ($6K), so I have disputed that with the credit reporting agency.

Will we be able to get a decent home loan with both of us having 620-650 FICO's? We were looking to buy a house at the end of this year. We have NO debt, I am currently shopping around for a secured credit card for both of us to build up our credit.

I'm amazed that my husbands score is so high, being as before we filed it was barely 530!

Any other suggestions??

Thanks so much!
Daney

Daney, the lenders go off the discharge date. There are lenders that will do financing 1 day out of bankruptcy as long as you have a 580 score or better. Yes you will be able to get a decent home loan after a bk especially with those scores. The big thing is going to be rebuilding credit and rent checks if you dont already own a home. If you have any further questions let me know. I will be glad to help. Hope all is well.

First, continue timely paying on items such as your home and cars that were not discharged in the bankruptcy. Having at least a couple credit items you are paying on- time will help.
Second, limit the amount of other debts such as credit cards or bank loans. Too much debt will make it more difficult to qualify for a loan, particularly revolving credit accounts such as credit cards. Your debt-to-income ratio is one part of the puzzle lenders will look at in determining your ability to repay a mortgage.

With a foreclosure in my past, (year and a half ago) and still in a chapter 13 when do you think a person would be able to get a mortgage? With 30-40% down?

With 30-40% down and the foreclosure out at least a year you should be able to get financing anytime. Right now you should be able to qualify although the rate would be in the high 7's to mid 8's. If you have any further questions shoot me an email.

Thanks,

Hello! I've been reading some of the messages out there.I was told that i eather had to wait for two years or come up with 20% for the down payment if I didn't want to wait the two year period.Now my situation is that I am getting ready to file and I am concerned wheather or not by filing will affect me useing my VA certificate.I am under the impression that I will not have to put any money down when useing it.I ordered a copy of my credit report from the 3 agencies and got a score from TransUnion,it shows my score at 523 right now will filing chapter 7 affect that as well? Please help!

:rolleyes:
Lost home in Chapter 7 (Oct 2004) due to "lender negligence" 7 years ago. Now in process of buying home back from trustee and land back from Bank.
They want "cold cash" - DUH...............
Thankfully a friend is a land investor and is going to bail me out and he is going to buy it back.
But I also need info on how I can finance my home so I can return his money too him.
Right out of BK, nobody wants to loan against equity even if the house is paid in full...................$60,000 in equity. They all say I have to wait 2 years.
Want to get my friends money back to him as soon as possible.
Nobody will loan $18,000 against $60,000 in equity.
My FICO score is still over 700 even after BK. Have had a A+ credit rating for 40 years till this past year.
Property should stand "good" for itself. Why not????
Any suggestions, folks?
:confused:
Had

I can help you with a loan call me....

I know this subject has been covered a thousand times, but upon reading through all the old posts, I need an answer to something I read.....

I plan on buying a house after filing 7 (in a year or two of course) and I read in an old post that you can't refinance a house 4-7 years after filing. Is that only true if you owned the house prior to filing, or does that hold true if you bought after discharge.

Also, are there any other weird loopholes or problems I may have (besides higher rates) that I might encounter after discharge?

Hello! I've been reading some of the messages out there.I was told that i eather had to wait for two years or come up with 20% for the down payment if I didn't want to wait the two year period.Now my situation is that I am getting ready to file and I am concerned wheather or not by filing will affect me useing my VA certificate.I am under the impression that I will not have to put any money down when useing it.I ordered a copy of my credit report from the 3 agencies and got a score from TransUnion,it shows my score at 523 right now will filing chapter 7 affect that as well? Please help!


I have the same questions. I am waiting for our BK to discharge the market is HORRIBLE right now. Houses are expensive here in Oralando, Fl My husband is a Veteran. Can we use the VA loan option? I would like to buy in around two years, so we can save around $9,000 for a down payment. Will that be an aduaget down payment? Will we have to pay closing? or will that make it so we can only buy less of a house?

Also I was looking into Modular Homes, would we be able to go that way? (not the mobile homes, the real homes shipped to site) the housing market is out of control here and we are on a Deputy Sheriffs pay. Pre BK our credit score was very low, will it go up right after BK (confused on how anyone could have a 600score and need to file BK if you are able to pay on your credit on time how and why would they file BK????)
Thanks for any advice

Suzie

For all of you here that are lenders or brokers...maybe you can answer this for me?

Who is pulling our leg?

--------------------------------------------------------------------------------

I recently got my credit report from all three reporting agencies. Exp. Trans. and Exq. Then i went and got my FICO scores (that i had to pay for) for all three agencies. Thinking all was well, i went to apply for a loan to get a home. The loan officer pulled my credit and FICO scores and denied me. The scores that she recieved were 60pts lower than what i had, sooooooooooo, i went back and bought those FICO scores again, paying for each, again, and they were the same as what i had 2 weeks earlier. Now i don't know what in the world is going on but someone is pulling my leg. Has anyone else had this experience? Is there anything i can do to prove to the Lender that i am not pulling these FICO scores from my butt? Please Help.
Thank you

It has been one year since our final court date, we wanted to refinance since our mortage is 9 1/2 percent and the rate last year was around 4 1/2 - 5.
We were talked out of it. We were told no one would touch us..

So what is the truth / scoop on that? Should we try to refinance? We have never been late on a house payment even during the bankruptcy.

Any suggestions.. and perhaps a good place to start what finance company?

We have a fixed rate mortage.. want to keep it that way.

The best place to get your real FICO scores is at www.myfico.com/12
It costs $45 and you get all three files with actual scores. The ones sold invidivdually by each of the 3 players is there own score using their own formula.

*tap tap tap*

AHEM.

DO NOT WORRY ABOUT YOUR CREDIT SCORE!!!!


Make sure that you are worrying about what is on your credit report, and that it is being properly reported.

I have the same questions. I am waiting for our BK to discharge the market is HORRIBLE right now. Houses are expensive here in Oralando, Fl My husband is a Veteran. Can we use the VA loan option? I would like to buy in around two years, so we can save around $9,000 for a down payment. Will that be an aduaget down payment? Will we have to pay closing? or will that make it so we can only buy less of a house?

Also I was looking into Modular Homes, would we be able to go that way? (not the mobile homes, the real homes shipped to site) the housing market is out of control here and we are on a Deputy Sheriffs pay. Pre BK our credit score was very low, will it go up right after BK (confused on how anyone could have a 600score and need to file BK if you are able to pay on your credit on time how and why would they file BK????)
Thanks for any advice

Suzie


Sorry, but if you've filed BK, the VA loan won't allow you to go through them for a house.

I also would not recommend purchasing a Modular, or a mobile home. The market to have them financed is at about 0 right now, because they depreciate, rather than appreciate. In fact, we don't work with ANY lenders who will even touch mobile home purchases or refinances!!!

BUT, $9000.00 is a great start for a down payment. In fact, we have some stick built houses in our area that go for about the same price as a mobile home. I would definitely look into that first!

Sorry, but if you've filed BK, the VA loan won't allow you to go through them for a house.

This information isnt correct.......you simply have to wait two years from your filing date, and must have re-established good credit, in order to utilize your VA Loan benefit, after filing for Chp7 BK.

This information isnt correct.......you simply have to wait two years from your filing date, and must have re-established good credit, in order to utilize your VA Loan benefit, after filing for Chp7 BK.


Sorry.I should have clarified that.

I just didn't want someone coming and looking two months out of discharge, and thinking they could do that. I got ahead of myself. :)

We were approved for a VA loan 2 years out of discharge in March of this year. We found a house in April and closed in June.

Sorry, but if you've filed BK, the VA loan won't allow you to go through them for a house.

I also would not recommend purchasing a Modular, or a mobile home. The market to have them financed is at about 0 right now, because they depreciate, rather than appreciate. In fact, we don't work with ANY lenders who will even touch mobile home purchases or refinances!!!

BUT, $9000.00 is a great start for a down payment. In fact, we have some stick built houses in our area that go for about the same price as a mobile home. I would definitely look into that first!


Another thing besides the fact that VA will allow you to purchase a ome after BK is that a modular home and a manufactured home is not the same thing.

Manufactured Homes are sometimes called doublewides, singlewides. They are not treated as a stickbuilt home. Loans are a little more stringent on these types of homes, but they are not impossible. You just have to work with someone that knows what they are doing. Manufactured Homes can be financed through FHA, but are subject to structural inspections. Usually issues with thiese types of homes being attached real property, as far as a title search is concerned.


Modular Homes are homes that are brought in piece by piece and assembled on the job site and look like a regular Stick Built home. The financing does not differ from regular hoime financing. These homes are actually built better then a regular house because the frame is manufactured in a temperature controlled factory and them brought to the job site. I hope this clears up some of the confusion and bad information that is being passed around on this board.

Also you only need a 580 score to pruchase a home after the Discarge of a Chapter 7 BK with zero down. And you can buy a home while in a Chapter 13 just as long as the trustee Approves and you have a 12 month Chapter 13 Pay history. You can be approved for this loan with FHA OR VA while in a Chapter 13.

Nick Kusan
Professional Mortgage Consultant
"Top 25 Greater Columbus Home Mortgage Lenders," as Published by Business First

Another thing besides the fact that VA will allow you to purchase a ome after BK is that a modular home and a manufactured home is not the same thing.

Manufactured Homes are sometimes called doublewides, singlewides. They are not treated as a stickbuilt home. Loans are a little more stringent on these types of homes, but they are not impossible. You just have to work with someone that knows what they are doing. Manufactured Homes can be financed through FHA, but are subject to structural inspections. Usually issues with thiese types of homes being attached real property, as far as a title search is concerned.


Modular Homes are homes that are brought in piece by piece and assembled on the job site and look like a regular Stick Built home. The financing does not differ from regular hoime financing. These homes are actually built better then a regular house because the frame is manufactured in a temperature controlled factory and them brought to the job site. I hope this clears up some of the confusion and bad information that is being passed around on this board.

Also you only need a 580 score to pruchase a home after the Discarge of a Chapter 7 BK with zero down. And you can buy a home while in a Chapter 13 just as long as the trustee Approves and you have a 12 month Chapter 13 Pay history. You can be approved for this loan with FHA OR VA while in a Chapter 13.

Nick Kusan
Professional Mortgage Consultant
"Top 25 Greater Columbus Home Mortgage Lenders," as Published by Business First


Forgive me, but the mortgage company that I work for WILL finance purchases as long as you are discharged out of BK, and have a score above 500. In fact, we even have day after discharge financing.

We also consider modular and mobile homes to be in or near the same category, and will not finance them because of their depreciation. Therefore, I don't look at saying that as "giving bad information." I personally wouldn't consider purchasing either because you can nowadays get a stick built home for about the same price. And in fact, fewer and fewer companies are financing doublewides OR modulars because they depreciate so rapidly, and are not considered a good investment. Here in Michigan, unless you go through a private lender, you can finance a modular or mobile, ONLY if you have more than 50% down, or to refinance, more than 50% equity.

The best advice? Every lender is different! :) Have a nice day.

Forgive me, but the mortgage company that I work for WILL finance purchases as long as you are discharged out of BK, and have a score above 500. In fact, we even have day after discharge financing.

We also consider modular and mobile homes to be in or near the same category, and will not finance them because of their depreciation. Therefore, I don't look at saying that as "giving bad information." I personally wouldn't consider purchasing either because you can nowadays get a stick built home for about the same price. And in fact, fewer and fewer companies are financing doublewides OR modulars because they depreciate so rapidly, and are not considered a good investment. Here in Michigan, unless you go through a private lender, you can finance a modular or mobile, ONLY if you have more than 50% down, or to refinance, more than 50% equity.

The best advice? Every lender is different! :) Have a nice day.


Modular homes do not depreciate. They are the same as any regular home, infact you would not be able to tell the difference if you have ever seen one. Modular homes are not doublewides, yes typically manufactured homes do depreciate it just depends on the area they are located in. I have done several Manufactured homes and they have appreciated over the years. You can obatin Fannie/Freddie financing on a modular home 100% and a manufactured home 95%. You need to be in the business a little longer before you make acusations about the amount of money down needed on a manufactured home or amodular home which are not the same. I work with modular home builders and there is no issue getting them financed with any normal conforming loan no matter what state they are in. I work with at least 40+ lenders. You have to understand that people that are coming on this board do not know better and may take your advice as gospel and may miss out on a good deal on a home. You can not make general acusations that no lender will do them unless they are a private bank, it is just not true. There are a large number of LARGE banks that will finance manufactured homes. I think you may be getting the two mixed up (manufactured/modular). I thought that when I first started out also, I would not make general comments on public message board when I was not really sure what the difference was.

Modular homes do not depreciate. They are the same as any regular home, infact you would not be able to tell the difference if you have ever seen one. Modular homes are not doublewides, yes typically manufactured homes do depreciate it just depends on the area they are located in. I have done several Manufactured homes and they have appreciated over the years. You can obatin Fannie/Freddie financing on a modular home 100% and a manufactured home 95%. You need to be in the business a little longer before you make acusations about the amount of money down needed on a manufactured home or amodular home which are not the same. I work with modular home builders and there is no issue getting them financed with any normal conforming loan no matter what state they are in. I work with at least 40+ lenders. You have to understand that people that are coming on this board do not know better and may take your advice as gospel and may miss out on a good deal on a home. You can not make general acusations that no lender will do them unless they are a private bank, it is just not true. There are a large number of LARGE banks that will finance manufactured homes. I think you may be getting the two mixed up (manufactured/modular). I thought that when I first started out also, I would not make general comments on public message board when I was not really sure what the difference was.


Sir, I am telling you, we don't finance them, and we put modular and doublewides in the same category for financing with my company. I am not getting the two mixed up, and I do know what I am talking about. Thanks. I hope people don't come to this board, read everything that you say and take it for the gospel either.

And I would LOVE to hear about these LARGE banks that finance manufactured homes. We can't find a ONE that will unless you have about 50% down. And what of refinancing? We find that when we have appraisals done nearly 99% of the time all of them depreciate.

Like I said before, things are different from state to state as well. We have offices in 8 states, and every one is different.


EDITED TO SAY: I still also support looking at a stick built before ever considering a manufactured home of any type. They are often times cheaper and/or around the same price!

Sir, I am telling you, we don't finance them, and we put modular and doublewides in the same category for financing with my company. I am not getting the two mixed up, and I do know what I am talking about. Thanks. I hope people don't come to this board, read everything that you say and take it for the gospel either.

And I would LOVE to hear about these LARGE banks that finance manufactured homes. We can't find a ONE that will unless you have about 50% down. And what of refinancing? We find that when we have appraisals done nearly 99% of the time all of them depreciate.

Like I said before, things are different from state to state as well. We have offices in 8 states, and every one is different.


EDITED TO SAY: I still also support looking at a stick built before ever considering a manufactured home of any type. They are often times cheaper and/or around the same price!


Have you ever heard of Washington Mutual? Trustcorp? Ohio Savings Bank? Fifth Third Bank? There are about 20 more. Also why are you getting an appraisal on a manufactured home if you can not do them anyway?

It is a given that different brokers work with different lenders, and what one may not do-it is possible that someone else does. THE END.

Can we move back to topics that are more constructive? Such as, what are the requirements for someone to be approved for a mortgage after BK? (Specifics, please.) Give examples, like for XYZ lender, you'd need a score of such-and-such, and so many open TL's, and so much $$ in liquid funds.

Some questions I have-and I'd love to see the experts debate these-when is it appropriate to do stated or no doc, and what does this accomplish? I've seen the terms, and know what they mean roughly, but why would you go this route?

It is a given that different brokers work with different lenders, and what one may not do-it is possible that someone else does. THE END.

Can we move back to topics that are more constructive? Such as, what are the requirements for someone to be approved for a mortgage after BK? (Specifics, please.) Give examples, like for XYZ lender, you'd need a score of such-and-such, and so many open TL's, and so much $$ in liquid funds.

Some questions I have-and I'd love to see the experts debate these-when is it appropriate to do stated or no doc, and what does this accomplish? I've seen the terms, and know what they mean roughly, but why would you go this route?


Good idea.

Ideally, the best time for someone to purchase a home would be at least two years post bk with rebuilt credit history, and proof of rent payments for at least 12 months. For credit scores, our only requirement is that it be above 500. I also would suggest a substantial down payment. Not only is it good to have equity in your new home, but it's also a good idea because lenders are going to want to see that you can pay for a home as well. The down payment helps. Time on the job is the second most important thing. Make sure to have a good and positive employment history!

Stated or not.... that's a toughy. I try to stay away from these as much as possible!! :) We do work on them however. It just depends on what the circumstances are to be honest with you!

Our Ch. 7 was cleared in Nov. 2003. We are currently saving for a down payment for a home. We have read that we will need 20% down and that our ch. 7 will have to be cleared for 2 years. Is this true? We currently have not opened any credit cards, and our cars are paid for. We are making monthly payments on our student loans.
What steps do we need to do to ensure that we can get approved for a house loan?


(Note, this is NOT legal advice, but advice from a lawyer I know)

Most mortgage companies tell us that after 2 years, bankruptcy doesn't hurt your chances of buying a home, so long as you are otherwise qualified.

(Note, this is NOT legal advice, but advice from a lawyer I know)

Most mortgage companies tell us that after 2 years, bankruptcy doesn't hurt your chances of buying a home, so long as you are otherwise qualified.


To obatin conventional financing you need 4 years out of a BK but to obatin an FHA loan you only need 2 years out. FHA has the same rates as conventional rates ans only requires a 3% down payment, which can be gifted from the seller to obtain zero down loan. FHA is your best option for a good rate 2 years out of a BK. The most important thing is that you reestablish credit as soon as possible after the BK, and make sure all of your accounts in the BK are reporting correctly after the BK. The easiest thing is to get a $300 credit card and use it every few months and pay it off. If you are looking to buy a home right out of Bk or refinance your home after BK it can be done. You only need a 580 to get a 100% purchase loan one day out of discharge.

To obatin conventional financing you need 4 years out of a BK but to obatin an FHA loan you only need 2 years out. FHA has the same rates as conventional rates ans only requires a 3% down payment, which can be gifted from the seller to obtain zero down loan. FHA is your best option for a good rate 2 years out of a BK. The most important thing is that you reestablish credit as soon as possible after the BK, and make sure all of your accounts in the BK are reporting correctly after the BK. The easiest thing is to get a $300 credit card and use it every few months and pay it off. If you are looking to buy a home right out of Bk or refinance your home after BK it can be done. You only need a 580 to get a 100% purchase loan one day out of discharge.


See, this is what bugs me. I mean that now with the new laws, like the old ones. In reality, you'd be considered "Gold" as you couldn't do a BK for a long time now.

However, I can also see that any lender who isin't careful, would end up being burnt like a chicken in a overloaded broiler......

See, this is what bugs me. I mean that now with the new laws, like the old ones. In reality, you'd be considered "Gold" as you couldn't do a BK for a long time now.

However, I can also see that any lender who isin't careful, would end up being burnt like a chicken in a overloaded broiler......



True, but the whole idea of bankruptcy is a fresh start.
Too many creditors forget this, and in fact, I think that if we were to look more deeply into rejection reasons, we might even find that stating that a turndown due to bankruptcy is illegal. (Don't hold me to this, because I am only starting to research it.)

What I don't understand is the unwillingness from most to allow for a second chance. It's not like we can file again for SIX years. That means, in my books, that we would be less of a risk than, say, someone who hasn't filed and is up to their a$$ and elbows with credit cards and debt......

Sorry to return to this subject, but I was hoping to build a modular home next summer. I was told that modular homes are considered stick built. Do banks really not classify them as stick built? I was told the difference between a modular and manufactured home is modular is stick built and manufactured has a steel frame. The difference between the two is about $14K. Please don't debate about this, but maybe someone can shoot me a PM? Thanks.

Hi! I have not posted anything for a while, but I would like to reply to this qusetion of buying a home out of BK. My husband and I were discharged in March of 05, and we are closing on our first home Dec. 20th. It can be done. Lazar is right, you need to check your credit reports and scores to make sure they are correct with no errors. We had four or five that caused our scores to be very low, but once they were fixed, our scores went up significantly. we are now at a 711. Be patient. I don't know if I can say this on this board, I don't want to recommend any businesses, but Dominion homes has a great program for people out of BK. We got a great rate, 6.25%, and no closing costs. You might want to look and see if they build homes in your area! Good Luck!!!

I see your logic-a recent BK'er has no way 'out' for 8 years. BUT, if I were a creditor, I think I would be a little shy also. It is taking a risk to grant credit to a new BK'er because there is nothing to distinguish the guy who makes great choices but had bad things happen to him from the guy who ran up every credit card he had, and hasn't gotten his spending under control yet.



What I don't understand is the unwillingness from most to allow for a second chance. It's not like we can file again for SIX years. That means, in my books, that we would be less of a risk than, say, someone who hasn't filed and is up to their a$$ and elbows with credit cards and debt......

Congrats, and thanks for the positive post! We'll be in the buying a home after BK boat, sometime between August '06 and May '07.

Hi! I have not posted anything for a while, but I would like to reply to this qusetion of buying a home out of BK. My husband and I were discharged in March of 05, and we are closing on our first home Dec. 20th. It can be done. Lazar is right, you need to check your credit reports and scores to make sure they are correct with no errors. We had four or five that caused our scores to be very low, but once they were fixed, our scores went up significantly. we are now at a 711. Be patient. I don't know if I can say this on this board, I don't want to recommend any businesses, but Dominion homes has a great program for people out of BK. We got a great rate, 6.25%, and no closing costs. You might want to look and see if they build homes in your area! Good Luck!!!

Hi! I have not posted anything for a while, but I would like to reply to this qusetion of buying a home out of BK. My husband and I were discharged in March of 05, and we are closing on our first home Dec. 20th. It can be done. Lazar is right, you need to check your credit reports and scores to make sure they are correct with no errors. We had four or five that caused our scores to be very low, but once they were fixed, our scores went up significantly. we are now at a 711

It's Slurpee Time! :yahoo: :yahoo: (I couldn't resist, I worked at 7-11)

Lets say hypothetically you want to buy a house 1 day after discharge. Your scores are above 580. What would a typical interest rate be if the market was at 6% for 30yr fxd? Just curious. Also would the amount of the loan be effected by the bankruptcy? Any experts out there? Thanks a million!

You can try here:

https://www.newcentury.com/fastQual/index.jsp

I found their website as they're known as being BK friendly. The link allows you to put in #'s (without anything that will run your credit) and get ideas on what programs they offer, including rates & payments. Your rate will depend, based on state and LTV%, as well as doc type.


Lets say hypothetically you want to buy a house 1 day after discharge. Your scores are above 580. What would a typical interest rate be if the market was at 6% for 30yr fxd? Just curious. Also would the amount of the loan be effected by the bankruptcy? Any experts out there? Thanks a million!

WOW. Thanks StaciMM! That is a great website!

There is life after bankruptcy. I'm a mortgage broker that have approved loans for people one day out of bankruptcy with 100% financing depending on credit score. I currently am licensed in Iowa and if anyone is interested in seeing what they qualify for or how to clean up their credit after bankruptcy call me today at 515-276-7878 and ask for Michelle at Advanced Home Lending

Can anyone recommend any mortgage companies? I am ready to start looking, but I don't want tons of inquiries. My FICO is about 650 (middle score) I am post-bk about 7 months. I would like to go with an ARM (since I will be refinancing in a couple of years) with a low rate--around 6% or so. Is this possible? Has anyone been approved with this and with what mortgage company?

You should have a few options, assuming you are basing your mid score on FICO. I'm working with someone who posts alot at credit boards.com, I'll pm you his contact info...

The best place to get your real FICO scores is at www.myfico.com/12
It costs $45 and you get all three files with actual scores. The ones sold invidivdually by each of the 3 players is there own score using their own formula.

I checked out the FICO site with the BBB Online and they have an unsatisfactory rating. This stoped me from using them as I am a member of the BBB and I know how they work on giving a business chances to clear up complaints.

mortgagebroker1
My bankruptcy was dicharged in 6/2005. Currently I am disputing things left on my credit report to finish cleaning it back up. As far as I know my credit score is 580 You stated earlier that you can help someone in my postion secure a mortgage how do I contact you to further discuss wether i would qualify for a mortgage?

Gamblingman-

FICO is the only outlet for getting your FICO score. They don't let anyone in on details to their methods for calculating the score, so buying a score from another source will not give you the same results.

Kind of like how a person graduating from a high school in one state compared to a person graduating from a high school in another state... States & schools tend to have different educational strengths/weaknesses, and requirements for graduating. Even if the 2 have the same GPA, their education is not necesarily the same.

Well, I talked to a mortgage broker today (yes..impatient) and she told me that a person will not qualify for a mortgage with a forclosure and bk listed on cr (for at least two years) I have 5% down now, but that isn't good enough. I am beginning to wonder if this woman knows what she is doing, because I thought you could get financing after a bankruptcy? What do you all think? My mid score is 624 and my DH is 630. What is the problem????

yes you can get financing. who knows what she was talking about. all you know is you dont want to do business with her. thats all. next....

the longer you wait the better the offer will be though. google 'lendors' or 'realator' in your area and start calling them for advice on the list. make a list and report back to us adn share if you can. see what they all say.

AHHH...I don't know whether to cry or say to he&& with it! Then I look at bkfiler's picture and I laugh! I will let you know. I am talking to several others. The stupid forclosure was a result of the bk. I can't tell you how many people said that it wouldn't matter. Now I am stuck! It's not like I can file bk again!

The broker you spoke with might only work with Prime lenders. Under 2 years after BK, we're in the subprime market. You'll need a broker who deals with all types of loans...

I checked out that page staci listed, it said we q'd for an 80/20 loan, anyone know what those are about?

two loans - 80% loan and a 20% loan.

80% is toward the house.
20% is for the downpayment you are supposed to have for a house.

you have to be very careful with those because you are paying on two loans and it can be costly.

It looked kinda high. I'm thinking we're just gonna wait out at least a year. Dh's TU score is 640 w/errors listed so we should get something decent in a year or two I would think. (We re-affirmed my van so we have those payments to help the score)

An 80/20 can be done to avoid the private mortgage insurance.

Find a broker to talk to-it can give you an idea of specific goals to work on. I can recommend one that I'm working with. He has been great with questions, etc. even though we really won't be a customer until summer. He is licensed in all states but ND, SD, MT, VA, NY, LA, TX, NV, & RI.

well keep on it and become the expert :D

nice baby pictures. my baby is cute too :D

Mine! She is my big girl, not your baby!

well keep on it and become the expert :D

nice baby pictures. my baby is cute too :D

You have a cute BABY


I cute BABIES

Damn that is really confusing with BK have ing staci's kid in an av.

That is his purpose. She isn't even a baby. She is a big girl.

Damn that is really confusing with BK have ing staci's kid in an av.

cant i be a proud daddy?

women alway going around complaining about how ther kids dad dont take interest in the kids and look what we got here... complaining none the less.

tisk tisk tisk on you both :D

My scores are hovering in the 630-650 range. When i refi'd last year they were over 600. The broker was a man who handles nearly everyone where i work. I got 6.9 %, took out some equity, replaced everything with maytag, whirlpool gold water heater, and a Rheem High Efficiency AC (I only paid wholesale, friends in the AC business are a dime a dozen here and i have all theequipment so I did the install with a friend. The home has increased another 40,000.00 since, it's the South Florida market, so at this point i still have about 80,000.00 in equity. It is still going up here, Venezuelans are pouring in to Sunrise with bucks to burn, taking their hard earned assets from those who would sieze them. No PMI on my loan. You can refi or buy but your score will have to reach a little over 600. I know that down here twenty percent down is not necessary but you still need that for incidentals involved in a new home.

GMAC (Homecomings) is my Mortgage Co. A couple of minor issues so far, namely flood Insurance which i pay myself.

Once my property in Tennessee reaches the one year plateau in June I plan to start the house there. I'll let you know how financing goes on that, I plan to pay it off quickly, God Willing. At this point the BK is light years behind us. Jobwise I guess I've been fortunate, I'm not in the kind of job that is subject to layoffs or whims (you fire yourself, RARE). It is concrete and basically passed from generation to generation so that's not an issue and I started very young. A layoff would require 7 years full salary plus my pension so you all know i would welcome the deal. At present I'll retire with about 4000.00 in monthly benefit and have around 240,000.00 from the drop. my BK was related to a side business that we operated and of course it involved personal assets as well. I don't know the particulars of every situation, my job tends to make creditors easy to handle and when i bought my Truck the sales manager at the GMC dealer actually hugged me when i told him my employment situation. That and my rating at the time made it a sign and drive deal. Doubt it would today, though, we'll see.

It's hard to fathom some of the equity issues I read about in here because of our market down here. The new Condos (Artesia) they are building a quarter mile from us at Sawgrass Mills are now at 350,000.00 for the 1256 sqaure foot unit with a 709.00 a month maintenance fee. Ridiculous, but selling.

Oh, I forgot to tell you. This mortgage broker I contacted said that in the subprime market, you do not have to pay PMI insurance. Has anyone heard of this? I do not think this lady knew anything. She obviously wasn't specialized in dealing with subprime lenders. She didn't even understand why my house went into forclosure during the bk. HELLO....it is just a technicality for the lender to get the title back. The forclosure was the main problem...not the bk.

I wouldn't say that there is no PMI w/ subprime-but it is safe I think, to say there are ways around PMI. Such as doing an 80/20 loan.

My personal home buying goal-get at least 2 of my FICO scores over 640 (though 620 will do) by August. I'll be doing a full doc loan with First Franklin. With a score over 620, they'll do full doc w/ only 1 year employment verification-which we need as Dh changes jobs and has been w/ his current one since May 05. We'll do the loan as a refi, since we are in a lease purchase arrangement and can prove we've been making the payments. We'll have the option of taking cash out-not sure if we're going to but if we do, it will be to finish a bedroom, bathroom, and misc. room in the basement. If the market rates stay the same, we'd be around 6.5%. (Higher rate if not at 640, of course.)

I'm around 600 now on my FICO's, and in June my last late payments on my student loans will be 1 year old, and some new accounts will be 6+ months old, so I think the 640 is doable.

I definitely think 640 is doable. Good luck StaciMM. I am trying to do it now with a score of 624. DH is 630. I will let you know. I am working with several mortgage brokers to see who can get the best rates.

Here's a new kink the in the question scenario.

Both DH and I are self-employed. We arent' going to lose our house in BK. We're current, never missed a payment and have about 30K in equity. We'd like to sell the house after the BK and use the equity for a downpayment on a larger home.

However, income is the issue. What about no-doc loans after BK?

Depending on scores, you'll have options. To do a true 'no doc' loan you'll probably need to be high 600's. If you can verify a steady flow of income w/ bank statements, you may be able to go limited doc. The more documentation you can provide, the better you can do on a homeloan.

640 score with good equity is absoulutely no sweat. maybe one year from discharge would help also. Very doable.

FHA Loans don't require PMI. Neither do Rural Development loans. Both are government backed loans that help people with low scores and low down payments. The 80/20 loans are conventional loans meant to go around the PMI, also.

Well...it is happening! We were discharged and closed in Nov.05 and three months later...we got preapproved for a house. Our mid scores are 630 and 635. We have to have 5% down and our rate is 8.5%. Our broker is great and we go and talk to our builders tonight! Hopefully we will be in a house in 3-4 months. Good luck to all of you. If you want any more details, shoot me a PM.

We (my husband and I) were in a real pickle. We were trying to buy a home here in Tampa, and happened to bump into this guy in our area which is Tampa. He was really helpful and helped us get into a home with no money out of pocket, and even had our closing costs picked up by the seller. Now keep in mind we had decent scores but he made it a lot easier than we thought it woud be... check him out at www.atriummec.com. I don't know if you are in Tampa, but if you are Stuart is a cool guy there. That is who we dealt with at Atrium Mortgage Equity Co.

Sandra & Michael

Congrats! I'm not sure if you can get the rate re-worked in the next few months, but if you can-keep in mind you're not far from 640 and that would be a better APR.

Well...it is happening! We were discharged and closed in Nov.05 and three months later...we got preapproved for a house. Our mid scores are 630 and 635. We have to have 5% down and our rate is 8.5%. Our broker is great and we go and talk to our builders tonight! Hopefully we will be in a house in 3-4 months. Good luck to all of you. If you want any more details, shoot me a PM.

is foreclosure better thank bankrupcy we are already 3 months behind on our house. I believe we should just file b/c we do not make enough to pay our bills anyway need some advice. thanks

Mandy-that is a big question and not alot of info to answer it. If you post more about your overall situation (no personal details) in the BK forum, you'll get alot of feedback I'm sure!

thanks well our situation is that we are about $800 short every month to pay our monthy bills. we have about $15,000 in credit card debt. we have alreadly had a free consultation with a bk lawyer and he definitely recommened the ch 7. my husband seems to think that we are ruined for 10 years and the only loans no matter what kind they are will all be very high interest rate.

mandy-not to be rude but this isn't thre place for that question, might I suggest you place it here: http://www.bankruptcyforum.com/f6-chapter-7.html

First time post - so please be easy on me!

Our house went to foreclosure June of last year. We had some nice investors buy our house and let us rent from them until we could get back on our feet. We are going to be filing bk chap 7 in the next week which means it won't be finalized until June something. The problem is, they want to move out of state ASAP. Our "lease" is up in June and if things had gone as they were supposed to, it could've been extended after that. Since they don't want to be encumbered by this house after their move, they would like to be out of the loan. (Which I completely understand!)

Any thoughts on seller financed options? That way, we can stay here until we are ready to buy a new house and make the improvements needed to sell the house in pristine condition. My concern is making them feel like their investment is secure and not being stuck with our house as a liability.

Thanks to everyone here for being so helpful in the past. I've just now decided to "delurk".

An 80/20 can be done to avoid the private mortgage insurance.

Find a broker to talk to-it can give you an idea of specific goals to work on. I can recommend one that I'm working with. He has been great with questions, etc. even though we really won't be a customer until summer. He is licensed in all states but ND, SD, MT, VA, NY, LA, TX, NV, & RI.


can you share who are u working with?

if you want to purchase a home it is best to try to do so before you file the chapter 7. I am a mortgage broker and i help people who are in foreclosure and bankrupcy if you have a bankrupcy or foreclosure on your credit it is harder to get approve for a home loan, you would have to wait for at least 1-3 yrs before you can purchase a home. Now if you are in foreclosure and bankrupcy and you currently own a home you sholud try to refinance to save your credit or sell the last option should be the lease to buy back which i also do for clients who do not want to deal with a mortgage.

Hi All,

I'm new to these boards and have tried finding answers to this but saw this thread and after reading through, thought maybe you all could answer my question.

I am about to run a FICO (the site recommended from a user earlier on in this thread) for my husband and me.

My two questions are:

1) Is there a company out there that will allow us to monitor our credit report/score unlimited for a certain amount of time? Our bankruptcy was just discharged so we're in the beginning stages of rebuilding.

2) We own our house, owe approx. $178k and the house appraised for $219K last year. We really would like to get some home improvements done on the home, since my husband is a general contractor (which saves us thousands) because we plan on selling and would like to make more of a profit. The house would be worth a lot more with a few things we would like to do - so this isn't a matter of us going out and being crazy with money.

So, my second question being - is an equity line of credit or refi easier to come by than buying a new home? I am trying to look into equity lines but I do believe our scores right now are around 500 or so.

Thanks in advance!

if you want to purchase a home it is best to try to do so before you file the chapter 7. I am a mortgage broker and i help people who are in foreclosure and bankrupcy if you have a bankrupcy or foreclosure on your credit it is harder to get approve for a home loan, you would have to wait for at least 1-3 yrs before you can purchase a home. Now if you are in foreclosure and bankrupcy and you currently own a home you sholud try to refinance to save your credit or sell the last option should be the lease to buy back which i also do for clients who do not want to deal with a mortgage.


I waited 5 months.

there was a time when you needed 20% down after bk or for bad credit in general. Not true anymore. Being out of bk for 24 months or more makes you eligible for decent rates and zero down possibilities. I have been getting "subprime" people in homes with zero down for over 15 years. It's the banks that cant do it. Brokers have more power and knowhow to get the job done. check eloanservices.net

This is such a popular question - I have found an article that may help you with the house thing after bankruptcy. You'll fond something there that will help I'm pretty sure! Cut and paste this into your browser -

http://overcoming-bankruptcy.com/2006/06/05/how-to-buy-a-house-in-less-than-2-years-of-bankruptcy/

Here's something which is related to buying a house after bankruptcy - hope it helps (just cut and paste it into your browser) -

http://overcoming-bankruptcy.com/2006/06/05/how-to-buy-a-house-in-less-than-2-years-of-bankruptcy/

Sorry - the first post didn't look like it was going to work, but there it is - LOL!

i have no experience with these organizations but have been told by friends that they are great for working with people with credit issues. i've read through most of the info on their websites and it sounds good, but who knows! just thought i'd pass it on for those looking to buy a home.

http://naca.com/index_flash.pbl

http://www.easystreetrealty.com/

I would wait at least 2 years after a BK discharge to shop for a mortgage loan. I have some friends and family in real estate and mortgage business who tell me that 2-3 years is the magic time period in which to wait while you re-establish credit after a BK discharge. At least to get best rates and not gouged on a new home loan.

Mixxalot, this thread has been inactive for eight months. It's against our forum rules to post to a thread this old - there can be misleading or inaccurate information in it, especially since this one stretches back several years. Also most of the posters here are no longer active and will never see what you suggested. In this situation, it's much better to start an entirely new thread of your own - thanks!

Our Ch. 7 was cleared in Nov. 2003. We are currently saving for a down payment for a home. We have read that we will need 20% down and that our ch. 7 will have to be cleared for 2 years. Is this true? We currently have not opened any credit cards, and our cars are paid for. We are making monthly payments on our student loans.
What steps do we need to do to ensure that we can get approved for a house loan?
not needed, you should apply for a FHA loan using alternative credit (no credit score needed but we approve them down to 540 scores ( at market rates)one year out of bankruptcy and if its circumstances like death of a primary wage earner it can be done less than a year. You can be approved. use rent, dentist etc. I like to collect five letters. Its important to say the accounts age and it has been paid as agreed and ontime. let me know if you have certain questions.
jeff

not needed, you should apply for a FHA loan using alternative credit (no credit score needed but we approve them down to 540 scores ( at market rates)one year out of bankruptcy and if its circumstances like death of a primary wage earner it can be done less than a year. You can be approved. use rent, dentist etc. I like to collect five letters. Its important to say the accounts age and it has been paid as agreed and ontime. let me know if you have certain questions.
jeff

I am not sure how you can get someone approved less then one year out of BK, here are the guidelines straight from FHA. And the only circumstances that allow for less then two years is a circumstances out of a borrowers control, for example death of a spouse, etc...

E. Bankruptcy. A Chapter 7 bankruptcy (liquidation) does not disqualify a borrower from obtaining an FHA-insured mortgage if at least two years have elapsed since the date of the discharge of the bankruptcy. Additionally, the borrower must have reestablished good credit or chosen not to incur new credit obligations. The borrower also must have demonstrated a documented ability to responsibly manage his or her financial affairs. An elapsed period of less than two years, but not less than 12 months, may be acceptable if the borrower can show that the bankruptcy was caused by extenuating circumstances beyond his or her control and has since exhibited a documented ability to manage his or her financial affairs in a responsible manner. Additionally, the lender must document that the borrower's current situation indicates that the events that led to the bankruptcy are not likely to recur.

A Chapter 13 bankruptcy does not disqualify a borrower from obtaining an FHA-insured mortgage provided the lender documents that one year of the payout period under the bankruptcy has elapsed and the borrower's payment performance has been satisfactory (i.e., all required payments made on time). In addition, the borrower must receive permission from the court to enter into the mortgage transaction.

Additionally, the borrower must have reestablished good credit or chosen not to incur new credit obligations.

Hi Nick,

Thanks for all the good advice. I am beginning my second year out of bankruptcy with the hope that I can buy a home in 2009 or 2010. I am a little unsure on how to interpret the sentence I have quoted above. Are they saying that you should avoid borrowing or are they saying if you have borrowed money since the bankruptcy that you have paid on time. I guess what I am trying to understand is how should one manage credit AFTER the bankruptcy if the goal is to eventually buy a home. So far I have gotten a credit card which I am paying on time and I still have my student loans which have never been late (they have been mostly in deferment). What advice would you offer?

Bill