I am 6 months past CHapter 7 BK with credit scores around 590-605. I've got very little cash to put down or for closing costs. But, as you can see, I've come a long way in 6 months. Since filing, I got an unsecured Orchard Bank MC (paying on-time ALWAYS), kept car loan (making ON-TIME payments for 3 years), opened Target guest card with $200 cl, paying on-time. 1. Am I doing all the right things? If not, what else could I be doing to improve my situation? 2. Can I get a mortgage at this stage with a somewhat decent interest rate? I'd rather not get one over 10%, if possible. Your feedback is appreciated!
After my BK7, I had a car note, and a Providian secured acct. 18 months out of BK, I applied and got a mortgage with CTX. However, I am a veteran and I used my VA eligibility (which helped) and this limited their ability to charge me extra interest. I would wait another year....
There are no hard rules, all depends on the lender. But the line between exorbitant interest and what options you have 6 months post BK may keep you from making a purchase. I've heard that it "gets better" 2 years post BK. You can see my scores, I'll be shopping for mortgages soon, I'll let you know how it goes.
Two years past discharge you can get an FHA mortgage for a good interest rate and low down payment -- if you are a first-time homebuyer. My lender's FHA rates were the same as its 30-year conventional.
FHA w/ 3% down, but normally just after 2yr mark. I beleive you can get FHA even inside of 2yrs discharge but need 10% down. Conventional loans are better for inside 2yrs but at a higher rate. I found that a loan called "B Paper" is adequate with a reasonable rate. That is usually thru a private investor and may require a larger down pmt. Work with a mortgage lender for opinions. CTX is a good company. You can get most types of loans thru them. Be perpared for them to pull a report though, it's the only acurate way to go forward! I'd start there. Good Luck!
You can get a mortgage 1 day out of bk with some lenders but six months is a decent amount of time. If you feel you are financially ready for a mortgage I would check with a broker as apposed to the actual lender..the lender has just TEHIR programs..while a broker will be able to look at several different programs/lenders. Dont be too hasty in getting a home......make sure you are pressured into getting whatever comes your way. Good Luck.
