Hi All, Filing BK 7 this week, and hoping for a standard BK without to many bumps along the way. In short....I would like to look past the BK, and someday soon buy a home. My wife and I are so tired of paying a high rent, and we really would love to give our kids a house. Can anybody share their experience on how long it took after you were discharged, and you were able to purchase a house. Thanks, Mike
FHA requires 2 years post bk, and most lenders for conventional require 4 years post bk. there are subprime lenders that will do less time but you will get a jacked rate. i recommend waiting two years and during that time building a substantial emergency fund and down payment. that will also allow ample time to rebuild your credit.
Overall Jenz is correct, however there are good subprime rates one day out of BK. Do a 2 year fixed, ALWAYS pay your mortgage on time and refi in 2 years. Or wait 12 months and work towards establishing new credit. It does not mean a death sentence. Best of luck to ya!
Do you have any recommendations of mortgage companies to try for a home loan. My bankruptcy has been discharged almost a year now
What state are you in? I would recommend using a Broker/Loan officer rather than going straight to the "lender". They can evaluate the situation and find the best place to put your loan. Good luck!!!
The magic number seems to be 2 years after discharge. I just closed in March on my condo, it was 2 years and 2 weeks after my Ch7 discharge. Got a 5.5% 30 year fixed w/5% down. Do a careful assessment if you go sooner w/a subprime lender. Make sure you either don't have or know the exact cost of a pre-payment penalty on your loan, so you actually have the option of getting a better loan in a few years.
You can wait 2 years and not have a mortgage deduction and wait for home prices to rise or go for the best rate you can...take a 2 year loan with a 2 year prepay and refi in 2 years. It's all relative..everyone has different needs and opinions. All I'm trying to convey is that a BK is not a death sentence and you can get a loan right out of BK that doesn't have evil rates.
Can someone refer me to a loan officer in michigan that would have great knowledge of the best option? tmedawashington@yahoo.com
what is the difference between buying now/refi'ing in two years and waiting two years to buy? not everyone can deduct mortgage interest (i know i can't). and there is no guarantee home prices will rise or rates will go up.
sorry was interrupted before i finished my last post. that wasn't really directed towards LQ, just more of a statement that buying a house now doesn't guarantee anything about the future. i think anyone who files bk should take steps to safeguard it won't happen again before making a major purchase like a house. i am not anti-bk (i filed myself years ago). any person (bk or not) should 1) build an emergency fund while 2) repairing your credit than 3) save for a down payment. when rates fell 2 years ago no one thought they would last this long. they may not change. house prices may even drop - who knows? only the "magic 8-ball" does. don't jump in to anything without heavily weighing the decision. their is a huge difference between wants and needs.
My mom got a house about 6mths after filing a bk7..but here's the problem she had to come with about 20% down and her interest rate is 8%. The mortgage company she went throogh went through said she needed a credit score of about 525. I also have to mention that 2yr prior to that she sold a house so she had a mortgage history established.
The point I've been TRYING to make is.... YOU CAN GET A LOAN RIGHT AFTER A BK IF YOU CHOOSE TO. Enough sideline experts. Everyone is different with different needs and wants!!
Jenz: however most of the time this is the case in fact. But FHA also allows loans where there are cicumstances beyond the borrowers control that they are forced to file for BK. These would include, medical, death in the immediate family. The guidelines state that alternate credit must be used to determine the borrowers eligibility along with appropriate documentation of the circumstances and can be done 1 yr after the BK. Although it is tupically 2 yrs for most lenders, like some have mentioned you can qualify for a home loan 1 day out of BK if you want. However the amount that you must put down is going to vary on credit score and typically it is going to be a max of 80% loan to value. Also, the best and easiest way to get into a home with little or nothing down is simply after a BK make sure that you re-establish your credit within the next 2 yrs and DO NOT have any lates whatsoever. This is the biggest factor in qualifying is to show the investor that you have re-established yourself financially and will not file for BK again. There are many down payment assistance programs out there in which you will not have to put anything down on an FHA loan. This will give you the typical 3% downpayment to put in your pocket as a nest egg to build towards your monthly payments. You should have 6-12 months in reserves just in case of any unforseen hardships. BB AHMCC
Re: Re: After BK..buying a home while FHA does allow bk less than 2 years you have to prove it was extenuating circumstances and not financially driven. alternative credit can only be used if a client doesn't use conventional credit - it can not be used in place of bad credit. definitely agree that people should wait and rebuild their savings first. u a broker?
Re: Re: After BK..buying a home jenz: yes I am also alternate credit is used if they have not re-established any other credit since the BK. ex) payment histories on phone, gas, garbage, cable bills all will suffice this requirement. what do you do? BB AHMCC
Re: Re: Re: Re: After BK..buying a home ahh the headaches you have had then over the past 2 years, I feel for you!! now hopefully the newbies will leave the industry and turntimes will increase. What company do you work for? BB AHMCC
Re: Re: Re: Re: After BK..buying a home headaches -yes! buts its a lot of fun. i dont disclose where i work because i surf the boards to help my customers clean up credit issues (which typically results in better rates) and my employer doesn't like us doing it. all i say is i am in the midwest. i've been lucky - i've been able to manage a four business hour turn time thus far. volume has been huge - some weeks i work my 40 plus another 10-20 after the kids go to bed. slowing down for you yet?
Re: Re: Re: Re: After BK..buying a home jenz: I am in the midwest as well. the refi's have started to slow a bit. but I have been getting a lot of purchases lately. so I guess you could say a drop in one area and an increase in another pretty much evens everything out from where it was. Nice turn times, by the way. A+ drop me a email sometime boot21_2000 at yahoo dot com BB AHMCC
