Including house in BK is very bad....

[dogbone33]

Well, our lawyer talked us into letting our house go. It is worth 1/2 of what we owe and needs tons of work. So I got in touch with a builder that helps get your credit back up and all of that stuff. They told us we could lease until our discharge then we can do a land contract or just lease as long as we want. So we filled out the application. We got DENIED! So I asked why and she said it was because we included the house in bk. Well, duh, why would we be looking for a new house? It looks very bad and reflects on your willingness to pay. We were only listening to our lawyer, and were never late on any payments.. We couldn't sell it, and I want to get out of this dump. So back to looking for a nice house..... My luck sucks..... I asked them how long will it be before we could apply again....waiting for a reply.

[HHM]

Bad relative to what?

When were you discharged? If it was within the last two years, you were being pretty unrealistic about being able to get a house anyway.

Frankly, what else would you have done? Keep the house and NEVER be able to sell it because you are so upside down. You need to put this in perspective.

[fltoo]

Agree.

This is not bad luck, you just have to work through it.

[JRScott]

As HHM says it takes 2 years after the last bankruptcy to qualify for a federally backed mortgage, and in the current crisis I doubt anyone would give you a loan otherwise.

In the meantime don't look to buy a new home, rent something you can afford and make sure you can put away some each month towards a down payment on a home in approximately 2 years time.

If the house really was worth half what you paid for it, then the lawyer advised you correctly as the debt burden of the house would have placed an undue burden on your household.

[StartingOver08]

Dogbone, were you trying to do a land contract with the builder? I don't remember from your previous posts. But, the builder is looking to sell his inventory - some will even do a land contract for a limited time period (2 yrs or 3 yrs). The issue with including your home in the BK is that the new mortgage underwriting criteria has a longer wait period before you can qualify for a new loan to 'take out' the builder.

So, as the others have posted, your BK was designed to get rid of all the bad debt and most importantly a house you were upside down in by 50%. That was a smart move for you. The next step, purchasing another home, will take some time. In the meantime, rent (just a regular lease or loonngg term land contract) and heal your wounds/credit report/savings before you purchase.

[dogbone33]

Yes, we were going to lease this house until we felt comfortable to do a land contract. Then when we qualify get a mortgage. I know we can't buy a house right now.... The builder told me to contact them in 2 1/2 months when we are discharged then they can help. Frankly, I just want to get out of this house. A guy my hubby works with brother built a house a year ago and had to move for his job. The guy he had a land contract deal with backed out, so he was excited to hear we were looking. He is into realty or something so he said he would do a land contract for 3 years. We should be able to get our credit back up in that time. It isn't as big as the other house we were looking at but has a much bigger yard. So hopefully we will be moving in April.

[JRScott]

Good Luck to you dogbone, hope this deal will work out for you.