First Time Home Buyer

Hi guys,

My situation is kind of complicated. I had a chapter 7 discharge in August 2008. I don't have any debt now and my credit scores are in the 600 range. I have two credit cards with zero balance although I use them once per month and immediately pay off to try and build my credit back up.

I live in Hawaii and am looking at purchasing a home in Florida. I won't be moving there yet but I have family there and will within a few years. There are homes selling in the 40-60k range...some are short sale and some are not. I am looking at putting 10k down (early withdrawl from my Roth IRA.)

Does anybody know if this is even possible? I saw one old thread from 2004 which mentioned a two year waiting period but I don't know if that is outdated information. Any input would help.

Thanks

2 years is pretty standard and with the way the economy is right now, it may be hard to find anyone who will bend on that.

2 years is pretty standard and with the way the economy is right now, it may be hard to find anyone who will bend on that.

you would need probably close to 30-40% down in this econmy that soon out of BK. Banks are really *really* tight on lending right now. I had a guy with an 800 FICO that got declined for a 28k loan with us; and he had about 700k on deposit with us. Crazy right? Underwriters are nuts- and they don't want to see anything out of line.

Yep, lending is tight.

Unless you have 20% down, you better have top notch credit and a good job (and even then??). Right now, about all you can do if you have less than 20% down is FHA (which means you better have crystal clean credit...which, unfortunately, you don't).

Generally, FHA credit requirements are a 1 year period of acceptable credit. Four or more "trade lines" are required, but if you have not developed a credit history, "alternative" credit verification will be used. Alternative credit sources may include:

Utility Payments
Rental Payments
Automobile Insurance Payments
Telephone or other Payments

The following are creditrequirements set forth by FHA

Previous rental or mortgage payment history Your payment history is reviewed for the previous 12 months.

Recent and/or undisclosed debts A satisfactory explanation of new credit or inquiries will be required.

Collections are not required to be paid prior to loan approval if mitigating factors are present

Judgments will be required to be paid before your loan closes.

Chapter 7 Bankruptcy will not disqualify you if 24 months from the Discharge Date has passed and you have reestablished credit. FHA will consider a loan after 12 months if you can document the bankruptcy was caused by events beyond your control.

Chapter 13 Bankruptcy is allowed after 12 months of the pay out period has elapsed with court approval.

Previous mortgage foreclosure will be allowed after three years. In rare cases, an exception may be granted with very well documented extenuating circumstances after 2 years.

Government loan programs really are more lenient from a credit requirement perspective than conventional.