Can I get a mortgage with low score

I myself had the same problem. I filed a bk-13 in 1996 and was told in 2000 that my credit report would not help me in getting a loan. The biggest point was not the bk but how much time the bk was actually discharged. The longer the better. I am now on my third mortgage loan (the first was the actual mortgage, the second is for equity and the third was to refinance). The first loan was based solely on my wife's credit- so it was a high APR, the second time we both applied (in 2001) and was approved. The time we are still in the process of getting approved. The difference between the second and third loan was that I know what I needed to get a higher FICO (decrease my inquiries and debt) score. I used the same mortgage broker on all three loans, for he knew my background and was very helpful in seeing the progress that I was making. I took all our reports and had him give a good look over. I did not want to waste any inquiries. The mortgage broker came back with an initial response of a 7% rate, fixed mortgage loan. We are now waiting for the underwriter and the rest of the paperwork to be completed.

So there is a chance, may have to wait a year or so. Spend the time finding a good mortgage broker and work on your credit reports.

There are other posters here that would recommend a FHA loan, I am not sure how that goes. So keep your mind open with that as well.

If you have any questions, just ask.

Best regards,
Mirage

 

FHA isn't based on score. FHA requires minimum 2 years clean & re-established credit since BK discharge.

 

What about FHA and Chap 13. According to FHA, you can be approved even while still in a 13, before discharge as long as all pmts to the trustee are on time for a period of one year and the trustee approves of new mtg.

FHA says nothing, however about a discharged BK 13 and how long you have to wait. It doesn't seem like it would be two years as in a BK 7 if they will approve you while still in it.

Any ideas on this one? My 13 was filed in 1996 and discharged in 2001. Can I be approved for FHA now?? A waiting period doesn't make sense if I could be approved 2 years ago while still completing the 13!

 

you should be able to apply for a conventional loan. I bk-13 in 1996 and have no problems in 2002.

Best regards,
Mirage

 

What price range house are you looking for? There are non-conforming lenders that will, based on the information that you have provided, lend you up to 95% LTV. There are also some lenders that will allow you to get a 2nd mortgage at the same time. Though the interest rate on the 2nd will be in the low to mid teens. BTW your scores are not that bad, what non-conforming lenders do is take the middle score and use that to determine eligibility. There are a couple of lenders that only average the top 2 scores.

The important thing to know is that you MUST have a clean 12 month verifiable rental history with cancelled checks that can prove that you have not been 30 days late( or no more than 30 days late 1 time) on any rent payments(if you live in an apartment development then usually a letter from the apartment management on the apartment letterhead is acceptable to prove rental history). What you probably will have to do on your initial mortage is to pay a rate of around 10-12% for the first 2 years and then you should be able to refinance at a more standard and conforming rate. This gives the mortgage lender a better chance to see stability and responsability to pay on your part. To some on this board that may seem harsh and profiteering, but you have to understand that the lenders are taking a much bigger risk when lending in the sub-prime...non-conforming...arena.

Email me if you have any questions that I can answer off-board... fla_tan@hotmail.com

fla_tan

 

I agree with Fla_tan. You're scores, although low, are still workable by some lenders and the BK is over a couple years discharged.

I had a lender go through my stuff and has helped me out considerably. It didn't cost anything to find out a solution, so I've been recommending these guys to everyone that has questions about mortgages with problem credit. Seriously, it is worth your time to at least find out what to do, because even if you have problems now, things could be straightened out in a few months so you can enjoy a new home by summertime.

Try www.loansearching.com .
*Disclaimer: this is not meant to spam. These guys really did help me and my scores were crap at the time. So, it' my quest in life to spread the word.

 

BizNoteguy,

When you say crap scores, what were they. Did you have any other problems on the CR? What were the terms of your mortgage? Were the rates fair for you situation and how long did it take to get approved? Sorry for all the questions but I'm in the same boat and I'm looking for direction/assistance. Thanks!

 

Mirage: When was your BK 13 disscharged. Mine was filed in '96 and discharged in '01. Did you get a conventional mtg?

 

An underknown bit of info about BK's...mortgage companies would rather see a chap 7 than a chap 13 also the subprime lenders that I work with HATE to see those credit counseling type firms that have you make payments to them and they make your payments for you. They are a MAJOR RED FLAG and in most cases will quickly get you denied for a mortgage or cause your rate to jump by about 1/2 to 1 point so be very careful no matter what the firms or credit card companies are saying... understand the credit card companies are just out to get their money that is owed them. If you feel you must get counseling do so but don't let them set you up on a payment plan...the credit card companies will probably let you get setup directly with them(they just want their money).

Hope this is helpful.

fla_tan

 

Do you have any serious problems with your CR's? My scores are around yours and I make a pretty good income and don't have many bills. I don't want to get excited but I want my own home by fall. Thanks for any tips...

 

nj_newbie,

Congrats, and good luck on your appointment. At that time, you may want to get some clarification on the number of times they plan on running your reports...here's why.

wajaba

 

fla-tan:

Why would they rather see a Chap 7 than a Chap 13 on file?

In my Chap 13, I have repaid all my debts in full over a 5 year period. If I had gone Chap 7, they wouldn't have gotten a dime.

I have always been told that a 13 is better than a seven because it represents your efforts to pay off your debts rather than blow off your debts. That is supposedly also why a 13 only remaind on your reports for 7 years as opposed to 10 years for a Chap 7...

???

 

1) While it is true that creditors don't get anything in a 7, you have to, with only 1 or 2 exceptions(lenders), reestablish credit and they then are able to see a pattern of responsible credit behavior to judge loaning you money against. This is particularly true in a state like Fl. where your home is basically exempt from foreclosure in a BK as you can homestead(?) it as a protected asset.

2) I believe that you are allowed to file a chap 13 more than once within a 7 yr period but can not refile with a 7. But really, the bottum line with most lenders is...it doesn't make sense to them for you to do essentially the same damage to your credit with a 13 that you would get with a 7 and still have to make all those payments(their pragmatic side I guess).

One question to you?? Who is it that told you that a chapter 13 was better than a 7? I would bet it was either a lawyer or creditor. A lawyer gets paid alot more for a 13 than he/she would for a 7 and as you said, in a 7 the creditor gets essentially nothing. Just some food for thought.

Hope this helps

fla_tan

 

Flatan or any one..........can u answer where any lender would approve a FHA loan for a discharged 13 BK as in the span of time used by i think it was (Niceguy) filed in 96 and discharged in 2001........my scores are good {665 is middle score} but need to know what lender out there that is a national lender and has a loan product to get around that chapter 13 scenerio.... all i have been hearing is a minimum of 2 years post is required, others have said 1 year is needed.....I want to apply now but its discouraging me because i dont want to waste inquires.

And does this mean a HIGH INTREST RATE even with a FHA given the BK circumstance.


And by the way I need to go FHA because the most I could afford is the 3% DP.

Please suggest some places to check, or give some advice.......ty everyone on creditnet for any input

 

informed

You don't need to go FHA. There are national lenders that have conventional prgorams that with your apparant scores will go 100%. FHA is more lenient than conventional lenders, but both look at a BK in pretty much the same light.

If you wish, contact me off-board(I keep my email on) and I will provide you with more info.

Good luck and I hope this helps.

fla-tan