Purchasing home after Chpt 13 questions.

[lsag1994]

I read a lot of goos information on a previous poster's thread on Chptr 7, but I need answers about 13.

My wife and I are just off of 13 since Aug 26 2005. We actually quit making payments in April, but it took 4 months to get the discharge. Anyhow, we are ready to purchase a home. We have rebuilt our credit by getting some secured credit cards and one unsecured. We just bought our first vehicle since being discharged. It was used and we financed for 2 yrs @ 398.00 a month. My wife's credit score is 660 (avg. of the three) and mine is 620 avg. I believe we have some buying powers, as we have friends financing homes with less credit ratings, barring no bankruptcies. Another note, combined we make $105,000 + a year, with very little debt ratio. Actually the cards and the vehicle are the only things we owe on.

So here are the questions;

What are some reputable Mortgage companies that will handle a case like ours?

How long will it be, before we can finance?

Can we expect to have a large down payment? Our payments were really large, as we wanted to pay it quickly, so we have a limited savings for a down payment.

Answers to these and any other info will be greatly appreciated. We are tired of throwing away $ 1000.00 a month on rent, and are ready to make an investment.

[Elf]

I'm just out of Ch13 this month and I'm already in the new place. We started looking when we made the last payment.

My income is similar. Our credit scores are about 10-15 points highter for each of us. We bought the house with an 80/20 mortgage. That's no down payment.

You can't very well have a huge down payment coming out of bankruptcy, no? We also bargagned with the seller to kickback some of the closing costs. We pulled a few thousand out of retirement to finish it off and move in.

I found a broker through Carteret Mortgage. Their agents sort of run their own show like Allstate agents do. Find one in your area, or a similar private broker that will work for you to find a mortgage. The interest rate on the 20% will be high, but you get to keep you cash.

A good real estate agent will also have folks waiting in the wings to help you. They have a vested interest in selling you the house.

Keep in mind: When you buy, all kinds of people are going to make money off of you. You will find people hungry to do just that. What you will find is that you're concidered a good risk because: one, your income is "high" and two, becasue you finished a Ch13. Not many people actually finish.

There is money out there. You just have to find it and be willing to pay the price of it for a few years.

You probably found that out when you bought the car.

We bought the house to get into the area we where we want to live. Property is still skyrocketing around here. Next year we'll refinance to a better rate.

We bought the house first and then we bought the car. Our cars were being held together with duct tape. We hadn't bought one for four years prior to filing, and they were used. We were trying to not have to file.

We decided to do the house first so we didn't have the debt. We just added the $300 a month car payment. This one is also used, but we really like it a lot.

When can you do this: Find a mortgage agent. Be very upfront and get that pre-approval letter in your hand for the amount he/she thinks you can finance.

Then find a house that you love! Chapter 13 folks are really in a special place in the secondary mortgage market. There's money. It's coslty for a year or two, but then it gets a lot better. Be prepared for a lage payment and ready to refinance in a year or two. That means: make sure you buy where the value of the house will not go down, or you'll be in trouble.

Hope this helps!

[Lightning]

A house is not the only investment you can make. Are you both fully funding your 401k plans (at least up to the match)? Are you investing in Roth IRAs? Renting is not "throwing away' money. You're paying a fee for a service and a good. The $1,000 a month you're paying covers housing and maintenance.

How much do you have saved for a down payment? How much for unexpected expenses? If you read some threads here, you'll find that many people who file bankruptcy don't even have enough equity in their home to meet the exemption for bankruptcy. Buying a house does not equate to instant investment unless you're putting a good amount in as a down payment and plan to stay in the home for many years.

With $105,000 as income, you could probably qualify for a home loan 3x that which would be $315,000. With some rough estimates for the interest rate, insurance, and taxes, the monthly payment comes out to about $1,800 - $1,900 a month. That's nearly a third more than your rent. You could, of course, buy a much cheaper place.

Say you buy a home for $200,000 with no money down. So much of your payment will go toward interest that you'll only end up with a few thousand in equity after a year assuming you don't take out a home equity line of credit and the house doesn't go down in value.

Generally, buying a home is a good long-term investment. You need a place to live, so you might as well accumulate equity in the process. However, since you're just out of bankruptcy and likely without much savings, it's quite a risk. You can't get of the mortgage by filing bankruptcy again for quite a while. You'll also need to live in the house for several years in order to recoup moving and closing costs. If you move too soon, you won't be any further ahead financially than if you had rented.

Buying a home isn't a decision you should make right out of bankruptcy and because you see rent as a waste of money.

[StaciMM]

We're leasing a home (will buy it SOMEDAY) and have been for the past 3 years. In retrospect, its a good thing we weren't in shape credit-wise to buy it then. Our agreement is $25k below what it appraised for 3 years ago, and our area has done well in regard to appreciation. I looked up sales of the comps used in the appraisal in 2002, one sold for 7.5% higher in 2003 than it was bought for in 2002 and I believe 7-9% is the trend for the area.

Anyhow, if we owned it now, we would have lost it. I don't think owning the home would have improved our financial situations over the past 3 years (auto accident, job loss, etc. etc. etc.) but we would have lost it in the BK as GA allows $5k exemption per spouse and I figure its gained somewhere between $25-50k in value in the past 3 years.

Anyhow, one tip I read (somewhere, not sure which board) is that when you buy, find something that you can easily afford rather than something you can barely afford.

[lsag1994]

We found a lender that will finance us. Our scores were higher than what MYFICO reported, a good 20 or so higher.

We are approved on a 30 year fixed fo 7%, or a 3/27 arm for 5.9% initially. We may do the latter, and Refi in three.

It's out there for us, you just have to shop.

[StaciMM]

Congrats! I hear that mortgage lenders use a 'mortgage enhanced' score, I'd love to know what factors enhance the score, LOL!

How far past BK discharge are you, and what was your score? How much $$ are you putting in at closing? (I hope you don't mind all the questions!)

[Okolzig1]

New Mortgage/Refinance

Hello everyone, my name is Julie and I am a loan officer. I have lenders that will give home loans (or do refinances) to people that are 1 day out of bankruptcy. Owning a home out of bankruptcy is not impossible. My e-mail address is [email][email protected]
I am a honest loan officer who works for a honest company that does not allow the loan officers to charge bogus fees. I am here to help if anyone would like to talk. If my office is not licensed in your state then I will hook you up with someone that is.