Rent or buy???

[aless01]

My husband and I have court tomorrow Chapter 7. We have foreclosed on our old house and are staying with family and trying to save money for a new place. What should we do, Rent or Buy??? What will we need to do??? How much money should we save??? How soon can we get a mortgage after our court date, which is tomorrow??? Where should we go or who should we talk too?



Some more info about us . .
We would rather buy than rent.
We live in Michigan.
We have never stopped paying our cable/internet bill, phone bill, car payments, & insurance bills. Hence, this would show some good standing on our credit reports.



Thanks in Advance

[relief13035]

I highly doubt you would qualify for a new mortgage to buy a house. I can't even get a bank to open a new checking account for us.

[WorkingItOut]

I am pretty sure I've read that you have to wait 4 years after discharge for a traditional mortgage and 2 years for an FHA mortgage, but someone correct me if I'm wrong.

You're going to have to rent for awhile, especially in this economy when people with good credit are even having problems getting loans. It makes no difference that you have paid your cable or phone on time. You've filed bankruptcy. Your credit is shot.

[moneytree]

rent for 2+ yrs, rebuild your credit, then talk to a lender...

our discharge anniv. date isn't until 2/14, but we qualified for a mortgage in oct. because the usda rural home development loan (FHA, no PMI, 2% fee into loan, & include closing costs into loan, & no $ down, just $500 earnest $ which we didn't get back and we had to pay $180 at closing)

this loan program has been out for 20+ yrs, but was rarely dipped into...

the funds are drying up though---and it is a little extra paperwork w/ your lender

since you are in MI, i am sure there are outlying areas where you could find a home in the usda guidelines, just do some research online

our lender said they are toughening up and might request 4+ yrs post BK for this loan after the 1st of the year (up until now, it was 2 yrs...if not less)

because you foreclosed on your home, that might be another ding against your qualification----we've had enough disappointment the past 'x' amt of years, so i really recommend you just wait 24 mos (think of it as mos. and not years) and then talk to a lender

until then, subscribe to the score watch and quarterly monitoring thru the main fico website, apply for orchardbank cards a few mos. after your discharge, then try for a first premier card in 6 mos...

time will come
hang in there

and that extra $ you are saving by paying rent and not paying a mortgage, sock away and save! we are paying $440 more in a mortgage now, but only agreed to do this, because our $442 car pymt is almost pd off! it's been a long 4 yrs!

good luck

[Never_Again]

I am pretty sure I've read that you have to wait 4 years after discharge for a traditional mortgage and 2 years for an FHA mortgage, but someone correct me if I'm wrong.

You're going to have to rent for awhile, especially in this economy when people with good credit are even having problems getting loans. It makes no difference that you have paid your cable or phone on time. You've filed bankruptcy. Your credit is shot.

I don't think that there is a definite time frame, as it all depends on many factors, such as down payments, LTV ratiors, income ratios, and the like, in addition to credit. If you can provide alternate credit (such as your paid in time phone bills, etc.) it can help.

A mortgage banker that I have worked with for many years, was one of the people who advised me to see a lawyer about a bankruptcy. He told me that he had two couples, one filed for bankruptcy, and set about doing things right. The other struggled along and tried to pay bills off, never really getting ahead, but not going behind.

In a year, the bankrupt couple qualified for a prime mortgage, and the other couple could not be underwritten.

The big problem for you, will be a foreclosure. That can be looked at worse than a bankruptcy.

You definitely have some work to do, before you will be buying a house. Settle in, and keep working at it. 30-40 percent down may go a long way towards easing mortgage companies with the jitters.

[aless01]

Thanks everyone for your input. How do you think the market will be at this time?? In two years I mean. A buyers or a sellers market??? Also how much money do you think we should have saved to put down on a new home. I am in school and my husband works for ford on the line building trucks. Right now he brings home around $850 a week. We obviously don't have much money. I should be done with school in a couple years and then will contribute to our income.

[AngelinaCatHub]

Thanks everyone for your input. How do you think the market will be at this time?? In two years I mean. A buyers or a sellers market??? Also how much money do you think we should have saved to put down on a new home. I am in school and my husband works for ford on the line building trucks. Right now he brings home around $850 a week. We obviously don't have much money. I should be done with school in a couple years and then will contribute to our income.

Aless01, Look for “Rent to own” or Contract for Deed” (same thing),

Remember, we are now in a glut of houses for the same reason you have. A neat thing about Contract for Deed is if you pay it out, you own it. If you cannot, there is no penalty. ‘Hub

[WorkingItOut]

Thanks everyone for your input. How do you think the market will be at this time?? In two years I mean. A buyers or a sellers market??? Also how much money do you think we should have saved to put down on a new home. I am in school and my husband works for ford on the line building trucks. Right now he brings home around $850 a week. We obviously don't have much money. I should be done with school in a couple years and then will contribute to our income.

20% down (or more) will give you the most options. FHA requires at least 3.5% (it's 3% now I think, but it's going up in January).

And I read on another board that with a foreclosure you have to wait 3 years. But again, don't hold me to that.