JoyH
07-29-2006, 08:07 AM
My husband and I filed CH 13 and are buying a home 2 years and 4 months after filing (we've been discharged). From what I've learned through mortgage shopping, a CH 7 is a little different in that most lenders want 2 years from the date of DISCHARGE to elapse before they'll lend you money. With CH 13, it's usually 2 years from the date of filing. That's not to say you can't find a lender immediately afterwards but be careful......you don't want to pay predatory rates. If you know your credit score, EQUIFAX.COM has a search engine that let's you plug that number in and find out the rates available to you. I don't think you have to buy anything to use it.
Look at your credit reports and correct everything on it. This will take time with many repeat letters mailed so start now. There will probably be accounts that are recorded as CHARGE OFFS when they should say INCLUDED IN BANKRUPTCY. This is very important. Look everything over carefully. Make sure the balance on each account included in your BK says $0If you are listed as an AUTHORIZED USER on an account, make the credit agency remove it from your report.
Remember that everyone should be able to obtain totally free credit reports from the 3 biggest agencies once a year. I think the website is FREECREDITREPORT.COM
If you're still making CH 7 payments, make every payment on time! Your good BK payment history may be a requirement of some lenders.
Next, join a credit union. They will almost definitely allow you to take out a small loan with a deposit as collateral. As you pay it off, your good payment history will be reported to the credit agencies and will cause your score to go up.
Get a credit card. Use it very lightly, don't pay it off completely, but ALWAYS make more than the minimum payment. NEVER let your balance go above 30%of your total credit available....this spells doom for your credit score. Providian or Washington Mutual as it's now called is a good credit card to start with. Avoid Orchard Bank, Aspire and others unless absolutely necessary. Capital One is another good company that is BK friendly but they're in trouble (along with the credit reporting agencies) for not reporting the credit limit of their card holders. This is a damaging ommision for the card holder because when you use the card, from a credit scoring point of view, it looks like you have a huge chunk of your available credit being used (even if it's just a little) because there's no credit limit reported to offset it. That reduces your score!! This benefits Capital One because it makes their card holders look bad to the competition so they get to retain you as a customer.
When you're ready for a mortgage shop around. Chase Manhattan offered us 7.775% with a 7.9 APR for a 30 yr fixed, 1 point, and a 5 yr prepayment penalty. We went to a broker who got us a 30 yr fixed at 6.75%, 0 pts, 0 origination fee, and a 6.87 APR, and no prepayment penalty. Big, big difference.
And of course, save, save, save!
The best of luck to everyone!
Look at your credit reports and correct everything on it. This will take time with many repeat letters mailed so start now. There will probably be accounts that are recorded as CHARGE OFFS when they should say INCLUDED IN BANKRUPTCY. This is very important. Look everything over carefully. Make sure the balance on each account included in your BK says $0If you are listed as an AUTHORIZED USER on an account, make the credit agency remove it from your report.
Remember that everyone should be able to obtain totally free credit reports from the 3 biggest agencies once a year. I think the website is FREECREDITREPORT.COM
If you're still making CH 7 payments, make every payment on time! Your good BK payment history may be a requirement of some lenders.
Next, join a credit union. They will almost definitely allow you to take out a small loan with a deposit as collateral. As you pay it off, your good payment history will be reported to the credit agencies and will cause your score to go up.
Get a credit card. Use it very lightly, don't pay it off completely, but ALWAYS make more than the minimum payment. NEVER let your balance go above 30%of your total credit available....this spells doom for your credit score. Providian or Washington Mutual as it's now called is a good credit card to start with. Avoid Orchard Bank, Aspire and others unless absolutely necessary. Capital One is another good company that is BK friendly but they're in trouble (along with the credit reporting agencies) for not reporting the credit limit of their card holders. This is a damaging ommision for the card holder because when you use the card, from a credit scoring point of view, it looks like you have a huge chunk of your available credit being used (even if it's just a little) because there's no credit limit reported to offset it. That reduces your score!! This benefits Capital One because it makes their card holders look bad to the competition so they get to retain you as a customer.
When you're ready for a mortgage shop around. Chase Manhattan offered us 7.775% with a 7.9 APR for a 30 yr fixed, 1 point, and a 5 yr prepayment penalty. We went to a broker who got us a 30 yr fixed at 6.75%, 0 pts, 0 origination fee, and a 6.87 APR, and no prepayment penalty. Big, big difference.
And of course, save, save, save!
The best of luck to everyone!