Buying a house after Bankruptcy

[okiemama]

Help finding a mortgage lender?

We have a somewhat unique situation. We filed Ch7 and the discharge was 07/09. We included our house in the BK, but it hasn't been auctioned yet. It is just sitting there vacant. As far as we know, the bank has taken possession of it, but it has not shown up on our credit report as a foreclosure yet. Our monthly household income is more than $10,000, and our monthly debt is only about $500. We are currently renting, and got a car loan in March, and have had no late payments since the discharge.

My question is: Might it be possible for us to find a lender to give us a house loan ($150,000 or so) at this point? We wondered if we would have a better chance to get approved for something before the foreclosure actually shows up on our credit, but unfortunately it's before the preferred 2 years after discharge. We can come up with 5% down, but would like to avoid having to come up with 10-20%.

Any help or advice would be greatly appreciated!

[scla]

The general view is that you should wait at least 2 years from the date of your bankruptcy discharge to apply for a home loan. This period will allow you some time to rebuild your credit. Although 2 years is what is generally recommended you can buy prior to the 2 years but you may be required to but a larger down payment to offset the risk to the lender. This article describes a bit more in detail Getting A Home Loan After Bankruptcy

[CurtInKS]

The economy has banks panicked about bad loans. I suspect once we sell our house, it'll be 3 years until a bank will look at us. That's fine by me. By then we'll have both cars paid off, so we can save back plenty. My wife is in a bigger rush than I am to buy a new house. I'll be fine living with my inlaws for free and then renting when that ends.

[monkatom]

okiemom hat was posted almost 5 years ago so not sure if the same rules apply. I have been searching for anyone who will lend 1 year from foreclosure and even with 20% down no debt and 130K income I am hearing it may be tough. If you hear of anyone let me know.
Thanks

[okiemom2008]

Sara:

There seem to be a misconception that after filing BK, you have to wait 2 yrs before you are able to get a mortgage. This is often not true. There are lenders (you just have to know where to look) that will gladly give you a mortgage 1 day after your discharge.

Where do you look to find these lenders?

[blondieblueeyes]

do you have a website?

[cool33097]

Wow, what a difference from 3 years ago.

[JustMeJaneD]

FYI - Down payment assistance programs were effectively just eliminated with the passage of the "Housing and Economic Recovery Act".....ameridream, acorn, nehemiah etc.. Ban on all down payment assistance programs goes into effect on October 1st. There has been a bill introduced just on the 31st to once again revive the DAP programs but word is that there isn't enough time or support for the bill. I guess we will see.

[BassBoy]

The "no loan without 20% down" is not entirely true. There is what is called down payment assistance through AmeriDream when the applicant is going FHA. It's being faught in court right now to abolish it, but it still exists today, so yes, zero down is still possible after BK.

[BKwhopperJr]

Wow, it's interesting to read this thread from the beginning...back in 2004..."you can get a 100% LTV, no doc loan, 6 months afer BK, NO PROBLEM!!" hahahahah

Unfortunately, the current reality is:

no chance of a "no doc" loan anywhere.

no loan without 20% down


So best path now is ...rebuild credit...SAVE $$ for the down pmt, and go for an FHA loan in 2 years.

[valter]

Re: Buying a house after Bankruptcy

hey thanks!!!!

[tradewiz50]

If your FICO scores are in the mid 600's you can go stated income or No Doc for a slightly higher rate. However, they require that your bankruptcy be at least 2 years old. So that does put a ding in most peoples plans if they wanted a house within a few months after there bankruptcy.

[HRx]

Please continue this conversation in the sticky thread that's in this forum.

[angelaohio]

improving your score

do you carry balances on those cards? if so, how high are they compared to your credit limit?

i ask because i also have 2 cards. the months that i paid my balances in full, my score shot up to 626. the month i made minimum payments, it went back down to 585. that's a huge differance just because of my balances!!

i suggest you try the same.

[highNdry]

A few years back when I was shopping for a mortgage my credit union told me that they don't charge PMI with a 3% or 5% down. May be you can check with your credit union and see if they have something similar.