will lenders *really* do FHA's in 2yrs?

[Tom_Mi]

My wife are about to file CH7. Business failed, very little other debt, good secure job @ 80k.

My brother-in-law (also a realtor) is telling me that in a not-hot market like Michigan, Lenders will still REFUSE to do FHA loans even at 2yrs with good income.

Am I going to have trouble here in Michigan, even with a solid job and 2yrs of good behavior???

[Flamingo]

Nothing is guaranteed credit-wise after a bankruptcy discharge. What some people may get or qualify for, others will not. BK does work against you in many ways and for a long period of time. Some people just do not get that in their heads and wonder why they consistently get denied when applying for credit, a mortgage or refinancing, or a car purchase, right out of BK. When applying for any credit or loans after a BK, just keep in mind there is always the chance you will be denied and if approved for anything, you need to watch the amount of the interest involved and any hidden or high fees.

No one can say whether or not you will have trouble in two years...the only thing you can do is try at that time...wishing you the best of luck....

[Logan]

Tom,

Your debt to income will be the most important factor assuming you've paid your bills on time.

Logan

[imaloser]

more important will be reserves-reserves-reserves-assets-assets-assets-savings-savings-savings (aside from a nice down payment).

[Logan]

more important will be reserves-reserves-reserves-assets-assets-assets-savings-savings-savings (aside from a nice down payment).

Hey loser,

Reserves are important in that you should have sufficient reserves to equal your income. A down payment will actually not help all that much coming out of BK since other than a reestablished history the debt to income will play the most important factor.

There is a good chance most of us will have to get an 'exception' to get the kind of loan we'd like and this is where the DTI will be scrutinized.

Logan

[Tom_Mi]

Thanks all,
My initial question was conservative @ 2yrs.

The reason for this is I'm talking to a guy who will do a land contract with a 5yr balloon. I just need to know that if I show up at a bank in 5 years with cash, income and solid history, they'll play ball and do the refi.

[imaloser]

Logan - i believe the higher downpayment the better your interest rate - plus it shows fiscal discipline. even fha has 3%. dpa is gone - history. gotta have reserves.

[Flamingo]

Thanks all,
My initial question was conservative @ 2yrs.

The reason for this is I'm talking to a guy who will do a land contract with a 5yr balloon. I just need to know that if I show up at a bank in 5 years with cash, income and solid history, they'll play ball and do the refi.

Your chances are good if you keep a solid credit history from the moment of discharge to that time. By that I mean no late payments on anything, not a lot of credit and few inquiries. Think pristine to get what you want. If you have a goal you really want to reach, then you have to work hard for it out of BK because that BK stares at creditors on your credit report when they pull it - you need to offset it as much as you can.

[angelaohio]

yes you can

I just refi'd with fha at 6.5%. my chapter 7 was discharged in jan 06. i could have done it sooner but had to pay off my credit cards first. my mid score was 638. signed the papers yesterday. my rate before was 11.8 and was going to reset in feb. i bought my house one year out of chapt 7. since bk i had one 30 day late due to a mix up of having 2 cards with same bank. but i strived to reestablish credit. i have 3 cc's and a loan from prosper.

so it is possible if you do it right.