Mortgage after ch. 13...

[jedutton]

I apologize in advance as I am sure this questions has been asked and answered several times... I am 41 months into my 60 month ch. 13 plan. I am looking to purchase a home in 2015 which will be a year after my case is discharged. My first question: is this possible? If so, I was wondering if I should start trying to repair my credit report now or wait until my case has been discharged and closed which should be somewhere in the early fall of 2014. I accessed my credit score through a free 30 day trial with a credit monitoring agency, and my scores were 591, 617, and 624. Any information, advice, or tips would be most appreciated.

Thanks for your assistance.

[kornellred]

Hello jedutton: there is a "Mortgage After BK" forum on this website that would probably be helpful to you in your information-gathering process, but I will tell you what I know.
Not only are VA and FHA mortgage loans possible after Chapter 13; they are possible while still making Chapter 13 payments. The debtor would need to demonstrate a perfect record of payments to the trustee and obtain the trustee's written permission to proceed with the mortgage application (or closing, depending upon the lender).
That being said - your FICO score will have to be in the high 600's before most lenders will even consider your application. The only way for credit scores to increase is for time to pass, unless there are errors affecting your current score that can be removed. Perhaps by the time you finish your Chapter 13 in the fall of 2014 your credit scores will be high enough for consideration.

Good luck. I just finished my Chapter 13 and my case was closed on 09/06/12. I was pre-qualified for a VA mortgage loan in August but my trustee is beyond reach except through my attorney, so I am waiting for my actual discharge from the BK court before I make an offer on a property. My case was completed three months ago, but I still do not have my discharge. Waiting sucks!

[jedutton]

Hey kornellred,

First, congratulations on completing your chapter 13! I am so longing for the day when I can say that. I appreciate the info, and I will be certain to check out the other forum that you mentioned.

[flowerchild]

I would suggest that you do start the clean up on your reports in preparation for your discharge. Depending on how bad or how much you have to clean up, it could take a while (like over a year). I started my clean up half way through my 5 year plan, and thank goodness I did, because I was in need of a vehicle really bad. I was sinking money into a rust bucket on wheels. Just a few weeks before my discharge, my car decides that it wants to start making a screaming noise anytime I stepped on the gas. So I new that it was just a matter of time.

I was discharged on 11/5/12 and on 11/9/12 I leased a new a car. I was also offered loans through two credit unions, one at 2.49% and another at 1.99% for up to $35K. My score pulled was 751, 730 and 727. So had I not done the clean up I am afraid to think of where I'd be right now. Those scores would easily qualify me for a mortgage and you too. I have read that some say why bother cleaning up your credit since you can't get anything anyway. But my question is why wait till you to need credit before you do something about it? By the time you need it then it's too late. That sure as heck isn't the smart thing to do IMO. Oh and my insurance went down considerably as well so in the end it definitely paid off.

So that is my experience and it worked out great for me!

[flowerchild]

Woohoo Kornellred! I didn't know you had completed everything so congratulations!

I know its hard waiting on those final papers. You would think that the courts would be a little more quicker on processing at the end of a case. Have you been checking pacer? I couldn't stop and I just happened to login the very day that my discharge showed up. Talk about jumping and screaming for joy!

I'm keeping my fingers crossed for you. I know you'll finally post when you get it.