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Purchase Planning- Not Sure Where to Start

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    Purchase Planning- Not Sure Where to Start

    Hi,
    I'm awaiting my ch 7 discharge next month. I included my FHA home loan in the bankruptcy with intention to surrender the property. The deed and mortgage is in both my husband and my name, but the note was in my name only. I was the only one that declared bankruptcy. We have a short sale offer and the bank now has expressed interest in completing a short sale, so I am hoping to resolve the home situation that way rather than foreclosure.

    We are trying to figure out the best way to plan for another home purchase. My issue, aside from bankruptcy, is that I am self employed, and as I understand it, have a 2 year "waiting" period anyway because my businesses were just started last year and it would be very difficult to find a lender to give me a mortgage just based on the self employment issue alone.

    My husband has a steady job and was not included in the bankruptcy. If we avoid foreclosure by completing a short sale, when would he first become eligible to get a mortgage? Could he use the FHA back to work because my income was drastically reduced after a layoff in 2012? His credit right now isn't stellar, but we could work on re-building it. I spoke to a mortgage broker a few months ago and he told me the minimum wait is 3 years after a short sale, deed in lieu, or foreclosure, but I don't think he was aware of the back to work program.

    If we can be eligible to buy based on my husband's credit after 1 year, that requires very different planning than a 3 year minimum wait.

    Does it make any sense to execute a quit claim deed and remove him as an owner of our old house, or at this point that doesn't really matter? anyway?

    #2
    Hi, think of this period of time as "extra time to save up a lot of cash" for the down payment" and relax. You have at least 2 years if not more to work on your husband's credit and meet the time required after the SS or foreclosure. What is the hurry? You are just getting out of a mess and you should have that emergency fund built up with at least 6 months of savings (or more, lots more) in case someone loses a job again or some other catastrophe hits. A mortgage is nothing but rent to a bank (and you have to fix everything that goes wrong while staying house poor) and who knows what the equity situation will be in the future, no guarantees.

    You have not even started the clock rolling with the deed being out of your name yet, relax and save some cash!

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