Buying a house after Bankruptcy

[BKwhopperJr]

Wow, it's interesting to read this thread from the beginning...back in 2004..."you can get a 100% LTV, no doc loan, 6 months afer BK, NO PROBLEM!!" hahahahah

Unfortunately, the current reality is:

no chance of a "no doc" loan anywhere.

no loan without 20% down


So best path now is ...rebuild credit...SAVE $$ for the down pmt, and go for an FHA loan in 2 years.

[BassBoy]

The "no loan without 20% down" is not entirely true. There is what is called down payment assistance through AmeriDream when the applicant is going FHA. It's being faught in court right now to abolish it, but it still exists today, so yes, zero down is still possible after BK.

[JustMeJaneD]

FYI - Down payment assistance programs were effectively just eliminated with the passage of the "Housing and Economic Recovery Act".....ameridream, acorn, nehemiah etc.. Ban on all down payment assistance programs goes into effect on October 1st. There has been a bill introduced just on the 31st to once again revive the DAP programs but word is that there isn't enough time or support for the bill. I guess we will see.

[cool33097]

Wow, what a difference from 3 years ago.

[blondieblueeyes]

do you have a website?

[okiemom2008]

Sara:

There seem to be a misconception that after filing BK, you have to wait 2 yrs before you are able to get a mortgage. This is often not true. There are lenders (you just have to know where to look) that will gladly give you a mortgage 1 day after your discharge.

Where do you look to find these lenders?

[monkatom]

okiemom hat was posted almost 5 years ago so not sure if the same rules apply. I have been searching for anyone who will lend 1 year from foreclosure and even with 20% down no debt and 130K income I am hearing it may be tough. If you hear of anyone let me know.
Thanks

[CurtInKS]

The economy has banks panicked about bad loans. I suspect once we sell our house, it'll be 3 years until a bank will look at us. That's fine by me. By then we'll have both cars paid off, so we can save back plenty. My wife is in a bigger rush than I am to buy a new house. I'll be fine living with my inlaws for free and then renting when that ends.

[scla]

The general view is that you should wait at least 2 years from the date of your bankruptcy discharge to apply for a home loan. This period will allow you some time to rebuild your credit. Although 2 years is what is generally recommended you can buy prior to the 2 years but you may be required to but a larger down payment to offset the risk to the lender. This article describes a bit more in detail Getting A Home Loan After Bankruptcy

[okiemama]

Help finding a mortgage lender?

We have a somewhat unique situation. We filed Ch7 and the discharge was 07/09. We included our house in the BK, but it hasn't been auctioned yet. It is just sitting there vacant. As far as we know, the bank has taken possession of it, but it has not shown up on our credit report as a foreclosure yet. Our monthly household income is more than $10,000, and our monthly debt is only about $500. We are currently renting, and got a car loan in March, and have had no late payments since the discharge.

My question is: Might it be possible for us to find a lender to give us a house loan ($150,000 or so) at this point? We wondered if we would have a better chance to get approved for something before the foreclosure actually shows up on our credit, but unfortunately it's before the preferred 2 years after discharge. We can come up with 5% down, but would like to avoid having to come up with 10-20%.

Any help or advice would be greatly appreciated!

[LSUTiger32]

We have a somewhat unique situation. We filed Ch7 and the discharge was 07/09. We included our house in the BK, but it hasn't been auctioned yet. It is just sitting there vacant. As far as we know, the bank has taken possession of it, but it has not shown up on our credit report as a foreclosure yet. Our monthly household income is more than $10,000, and our monthly debt is only about $500. We are currently renting, and got a car loan in March, and have had no late payments since the discharge.

My question is: Might it be possible for us to find a lender to give us a house loan ($150,000 or so) at this point? We wondered if we would have a better chance to get approved for something before the foreclosure actually shows up on our credit, but unfortunately it's before the preferred 2 years after discharge. We can come up with 5% down, but would like to avoid having to come up with 10-20%.

Any help or advice would be greatly appreciated!

Going to be awfully hard one year out unless you can explain and/or document a hardship. The guidelines are two years for FHA and 3-4 years conventional (especially in this economic climate). I am hoping to start the process of a re-fi next month when I get to one year out using Katrina as my crisis (because it was). Not sure even that is going to help.

[AlbanyMan]

We have a somewhat unique situation. We filed Ch7 and the discharge was 07/09. We included our house in the BK, but it hasn't been auctioned yet. It is just sitting there vacant. As far as we know, the bank has taken possession of it, but it has not shown up on our credit report as a foreclosure yet. Our monthly household income is more than $10,000, and our monthly debt is only about $500. We are currently renting, and got a car loan in March, and have had no late payments since the discharge.

My question is: Might it be possible for us to find a lender to give us a house loan ($150,000 or so) at this point? We wondered if we would have a better chance to get approved for something before the foreclosure actually shows up on our credit, but unfortunately it's before the preferred 2 years after discharge. We can come up with 5% down, but would like to avoid having to come up with 10-20%.

Any help or advice would be greatly appreciated!

I would think that you should explore saving some of that excess cash and even if you put 5k away in the bank a month in 6 mos time that will let you put a 30k downpayment on a $150k mortgage, in 12- 18 months you could save and pay cash for it as well and screw the bank.

[okiemama]

Going to be awfully hard one year out unless you can explain and/or document a hardship. The guidelines are two years for FHA and 3-4 years conventional (especially in this economic climate). I am hoping to start the process of a re-fi next month when I get to one year out using Katrina as my crisis (because it was). Not sure even that is going to help.

Well, 2 years of unemployment for my husband should explain it. That would be what took is to the point of no return. I am hopeful that with our debt to income ratio, our positive credit since the bk, etc will help get us in. Best of luck to you!

[okiemama]

I would think that you should explore saving some of that excess cash and even if you put 5k away in the bank a month in 6 mos time that will let you put a 30k downpayment on a $150k mortgage, in 12- 18 months you could save and pay cash for it as well and screw the bank.

This is true, but his income is temporary... he only has about 5 months left at this rate. He could remain longer, but I don't think our family could survive much past that. It wouldn't be a realistic answer for us, unfortunately. We are saving as much as we can, but it just seems like it's never enough.

[denisec]

Go to Capital One for a credit card, they are pretty good. I got a 0% credit card after 6 months post Chapter 7, and if you make 3 on time payments in a row, they will up your credit limit by $500. It's good to have 4 open credit lines - you don't have to put much on them, just a little and pay timely. You also don't need 20% down if you go to FHA, you only need 3.5%, plus closing costs of about 2.5-3%.