Want to purchase a house

[Papa Bear]

My wife filled a Chapter 13 before we got married and has been paying on time for over a year at 100%. We now want to get out of renting and buy a house. We tried under myself and I qualify for only 110,000. The house we want to purchase is asking 148,000. We qualify for more than enough with our income together. Our rent is 950.00 a month and our mortgage would be 990.00 a month (without escrow) at their purchase price. Do we have good chances of getting her approved for this by the court?

thank you for any help on this!

[lrprn]

It's very unlikely that a lender will agree to include your wife as a co-signer while she is in an active Ch 13. However, you never know until you try.

Start by asking your wife's lawyer to contact her trustee to request permission to seek out lenders. Since she's in a 100% payback plan, that will dodge the obvious issue about paying all disposable income into her plan and how does she have enough extra income to co-sign into a house.

I have to say though - it would be much better to wait until her Ch 13 is over. How much longer does her plan have to go?

Unless you have a large downpayment (15-20%) to put on the line, as I said it is extremely unlikely you are going to find a lender who is willing to loan money to someone in an active Ch 13. And if you are expecting to find a loan with 0-5% down, then those loans dried up about six months ago when the mortgage crisis reached the boiling point.

Don't want to be discouraging - just want you to understand what you two are up against. Waiting for another few years to go househunting while you save up a strong downpayment will get you much more in the long run.

[Papa Bear]

Thank you for your advise. My wife is only 1 yr in and has 4 more to go. We were actually lucky enough to find a mortgage company to give us a loan at 3% down. We are going to her lawyer to ask the court on monday. It is up to them now to allow it.

thanks