Questions about process, ins, outs, etc...

Ok. I'm looking at buying a home in the summer of 2008. I will have paid off my car in June 08 and been discharged two years that same month.

I've been doing a lot of looking around this site as well as the internet but I'm still confused. The info internet contradicts itself at every turn. I'm not fond of my parents but seeing as they don't know about the bk and wouldn't help me anyway, I'm not going to ask them for any help. They think their kids are financial screw ups since we don't make much money (sorry, off topic here) and I want to be able to go through the process on my own and say HA! to them when I'm done. Ok, I'm back now :)

I know precious little about homeownership past the fact that homes cost WAY TOO MUCH!!! Can people help with clarifying the process a bit for me?

One question from reading this board that comes to mind right now is about full-, limited-, and no-doc loans. What documents are required for a full-doc loan and what is the benefit of this?

As an aside, my middle score before discharge was 512. I haven't paid for my scores since discharge. I want to start cleaning up the reports first so that I can be pleasantly surprised (I hope).

Thanks so much for your help!

Ok. I'm looking at buying a home in the summer of 2008. I will have paid off my car in June 08 and been discharged two years that same month.

I've been doing a lot of looking around this site as well as the internet but I'm still confused. The info internet contradicts itself at every turn. I'm not fond of my parents but seeing as they don't know about the bk and wouldn't help me anyway, I'm not going to ask them for any help. They think their kids are financial screw ups since we don't make much money (sorry, off topic here) and I want to be able to go through the process on my own and say HA! to them when I'm done. Ok, I'm back now :)

I know precious little about homeownership past the fact that homes cost WAY TOO MUCH!!! Can people help with clarifying the process a bit for me?

One question from reading this board that comes to mind right now is about full-, limited-, and no-doc loans. What documents are required for a full-doc loan and what is the benefit of this?


Full doc loans are loans where you provide all of your income and assets to the lender. When it comes to documentation the more paperwork the better the rate. you should only be concerned about the outher documentation types if you have other income that you can not prove or write most of our income off on your taxes which is common for self employed borrowers. When is comes to loans more risk = higher rate, in this situation less documentation = higher risk

As an aside, my middle score before discharge was 512. I haven't paid for my scores since discharge. I want to start cleaning up the reports first so that I can be pleasantly surprised (I hope).

I would reccomend that you subscribe to a credit service like myfico.com the scores there are very close to what mortgage scores are. Ove important thing is onnce you are out of the BK is to reestablish credit, and get your reports cleaned up, and not to be late on anything after the BK, it will severely hurt your chances of getting a good loan after BK. Since you are in Ohio you will quailify for the Ohio Bond Money program which you can get a below market interest rate for first time homebuyers, currently is at 6.1% and you can qualify once you are 2 years out of the BK. Please feel free to ask any questions. You will be surprised how quick your scores will rebound once you have reestablished credit.
Thanks so much for your help!


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We've had to fax paystubs and that's it.

dh just got a raise so we have to do the ones between now & closing to prove it wasn't a fluke/ot (dh is salary so there is no OT for us).

Full doc shouldn't be hard for me. I've already, at 26, been with the same company for 9 years. I've reopened a credit card that I closed last year months before I filed and possibly will apply for another one in a few more months. That way I will have the length of history from this one and then one post bk account.

Another question: What exactly is an escrow account? What does the money you pay into it get used for or does it just sit there?

The escrow account is for your property tax. You pay it to the mortgage company as a monthly payment; however, the county only gets paid twice a year (in big chunks!).

I am a big and firm believer in NOT worrying about your credit score (because they aren't real anyway) and worrying about what is ON and what isn't on your credit report. Positive reporting, and good tradeline history is what is going to get those scores up to where you need them to be!

I don't personally recommend doing escrows. Several thousand homes a year are foreclosed on, due to the mortgage holder NOT paying up on the escrow for the house... I've seen it first hand and it's scary!

Krobin-you have excellent time on the job; that is definitely going to work in your favor! :)

We did have send last years tax return papers in as well I forgot.

We are not doing escrow with the house we are buying because they charge 1/8% higher to have one. Escrow is for property taxes and home owners insurance. We are just going to have to sit and save since we aren't going to have one. I would suggest doing it as long as there is not a fee associated with doing so. I can keep the $2K in bank for a year and collect intrest on it instead of paying intrest because they are keeping it for me.

Sometimes escrow is required if you don't put 20% down. I put down 20% on my home, so I think it's just something I was given an option to do and chose to do--but my memory may be failing me.

Would it make any difference that I'm in a townhome?

We did have send last years tax return papers in as well I forgot.

We are not doing escrow with the house we are buying because they charge 1/8% higher to have one. Escrow is for property taxes and home owners insurance. We are just going to have to sit and save since we aren't going to have one. I would suggest doing it as long as there is not a fee associated with doing so. I can keep the $2K in bank for a year and collect intrest on it instead of paying intrest because they are keeping it for me.


That is funny usually it costs more not to escrow, because of the higher risk to the lender.