Are FHAs the best loan for 2+ years out of BK?

[chucko]

I am looking to get an FHA loan when my BK is 2 years old, and wondering if they are usually (or always) the best rate for people like me. Will other non 'A' lenders be able to compete with FHA rates?

[emoney]

Usually, but not always. It depends on the credit markets when you want to finance. Right now they are up-sidedown becuse of low lending standards.
What I did when I was in your shoes was to get credit reports and correct all errors. Then keep all remaining open accounts paid as agreeded. Then save up a down-payment of 20%. Then you will own your home and not the other way around.
Regards,
emoney

[MTG_BANKER_OH]

I am looking to get an FHA loan when my BK is 2 years old, and wondering if they are usually (or always) the best rate for people like me. Will other non 'A' lenders be able to compete with FHA rates?

Another loan I like for people 2 years out of a BK is the My community loan it is a Fannie Mase sponsored loan and does not require 3% down and has lower cost mortgage insurance but it is more credit score driven then FHA you can also buy a home 2 years out of foreclosure if it was included in a BK with this program.

[invest1choice]

Can you get this my community loan if you have a bk 7 ? discharged 15 months? we are stilling looking ...

[MTG_BANKER_OH]

Can you get this my community loan if you have a bk 7 ? discharged 15 months? we are stilling looking ...

You will need 2 years.

[Courtney02908]

I am A loan Officer and if you have re-established credit you may be able to get a fannie Mae loan with the same great rates.

[ccidiot01]

I am A loan Officer and if you have re-established credit you may be able to get a fannie Mae loan with the same great rates.

Can you expand on that a bit. What exactly do you, as a loan officer, look for in a post-bk credit file?

Thanks!!!!

[MTG_BANKER_OH]

Can you expand on that a bit. What exactly do you, as a loan officer, look for in a post-bk credit file?

Thanks!!!!

Optimally you are looking for someone that has reestablished their credit since the BK and has made all payments on time since the BK as well, no collections, or chargeoffs since the BK. Also for your credit score it is important to make sure everything is reporting correctly after the BK is discharged. It is important ot keep all ofyour utilization low on any revolving account at least under 50% optimally under 30% of the credit limit.

[poorme]

Say Nick - can you comment on this? I left it in another topic i this forum hoping you would see it - Thx.

"I've been told that with certain hardship cases, particularly when a severe medical situation is present, that FHA can waive the two-year requirement for being post bk to 1 year, and provide standard rates (depending on how you've performed since."

[Elf]

Background:

We finished payments on a 13 two years ago in February. May was the three year mark. It took the trustee until September/October to close it all and order the discharge.

In the meantime, we decided that we were done and began house shopping, got prequalified, signed a contract, and ended up in the sub-prime mess. That was our fault as we decided to do an 80/20 so be could keep the old house as a rental. (very nice income) We actually secured sub-prime adjustables a little before the discharge was finalized at 6% for the 80 and 9% for the 20. We'd like to get them changed to a single fixed, and I'm considering a 15 year.

Question: The two year rule is from when?

The finished payment plan? The discharge date? From the three years of perfect BK plan management plus any of that time?

When do we start shopping for a new mortgage to get the best rate? Does it really make sense with a 6/9% split?

Thank you,
E

[HHM]

A few of the mortgage brokers will have more insight on your specific question, the general rule is 2 years from date of discharge...but that generally applies for chapter 7 cases. But if you are in a chapter 13, you have a few more options to mitigate the 2 year rule, for example, if you show the broker/lender your successful chapter 13 payments, there are some programs you can get into.

[Mortgage Guru]

FHA is the best flexible option the problem is mortgage brokers can't write them and the banks are tight on guidelines try a mortgage lender that has direct endorsement the rates are the same if you have a BK or not Period.
don't be fooled.

[FilingOnMyOwn]

How is it better than the fannie mae deal, without the down payment requirement and lower insurance?

[MTG_BANKER_OH]

Say Nick - can you comment on this? I left it in another topic i this forum hoping you would see it - Thx.

"I've been told that with certain hardship cases, particularly when a severe medical situation is present, that FHA can waive the two-year requirement for being post bk to 1 year, and provide standard rates (depending on how you've performed since."

This is true, it all depends on how good of a presentaton you can put together for an underwriter documentating your situation and h ow it was a one time occurence that was completly out of your control. This is extremely hard to get approved but it can be done.

[MTG_BANKER_OH]

Background:

We finished payments on a 13 two years ago in February. May was the three year mark. It took the trustee until September/October to close it all and order the discharge.

In the meantime, we decided that we were done and began house shopping, got prequalified, signed a contract, and ended up in the sub-prime mess. That was our fault as we decided to do an 80/20 so be could keep the old house as a rental. (very nice income) We actually secured sub-prime adjustables a little before the discharge was finalized at 6% for the 80 and 9% for the 20. We'd like to get them changed to a single fixed, and I'm considering a 15 year.

Question: The two year rule is from when?

The finished payment plan? The discharge date? From the three years of perfect BK plan management plus any of that time?

When do we start shopping for a new mortgage to get the best rate? Does it really make sense with a 6/9% split?

Thank you,
E

With a chapter 13 your clock starts when you file and start making payments, once you are discharged you should be able to get a confomring loan or an FHA loan as long as you have made your chapter 13 payments on time. You probably should have gotten a better deal when you came out of the BK.

Those rates are pretty good actually you probably will not save any money on a refinance your payment will probably be higher, but you will get a fixed rate, which is more important looking down the road to the future.


When did you take out your loan?

Is there a prepayment penalty on your loan? (If so you may want to wait unitl it is up to save some money on the refinance)