Mortgage after Ch7

[Curious]

Hi there everyone!
Does anybody out there have any idea how long it would take to qualify for a mortgage after a Ch7 BK? My husband and I filed, and are currently waiting on our discharge papers..we don't want to rush into it right away...but we would like an idea as to how much time we have to save up for a decent downpayment. We have no debt at all after Ch7..we surrendered a home and a car in the BK, and 2 credit cards were in there as well. I'm not sure if that makes a difference or not. Last time I checked our score it was in the high 500 to low 600 range (betweem both of us). Any advice would help...

[B12]

There are some very informative threads here addressing this issue. I think most of them are under the "mortgage" heading.

But, the short, simple answer is, 2 years from BK, and 3 years from a foreclosure.

I have seen it done sooner, but "it aint easy."

[SinkingFast]

Generally speaking,....... As B12 noted,........... You're looking at 2 years for conventional financing.

All the Gov't backed programs are pretty rigid on the 2 year rule. Unless you have extenuating circumstances. Circumstances beyond your control. Loss of job, death in the family, serious illness, or disability that contributed to your BK.

Anything less than 2 years and you're most likely looking at doing business with a sub prime lender. And sub prime lenders are being very choosy these days. Many are on very shaky ground for having given people credit that couldn't really afford it. Foreclosures are sky rocketing with the adjustables coming home to roost.

[MTG_BANKER_OH]

Hi there everyone!
Does anybody out there have any idea how long it would take to qualify for a mortgage after a Ch7 BK? My husband and I filed, and are currently waiting on our discharge papers..we don't want to rush into it right away...but we would like an idea as to how much time we have to save up for a decent downpayment. We have no debt at all after Ch7..we surrendered a home and a car in the BK, and 2 credit cards were in there as well. I'm not sure if that makes a difference or not. Last time I checked our score it was in the high 500 to low 600 range (betweem both of us). Any advice would help...

Conventional loans are 2 years BK 2 years FC, currently but lately these have been tougher to get approved then in the past. FHA is 3 years from sale of the home, so it can be longer then 3 years. It can be done sooner, but you are going to have to be pretty strong as a borrower.

[325Falcon]

Will the VA also have to wait the 2 years before they guantee a loan for a Veteran?

[DisneyGirl]

Will the VA also have to wait the 2 years before they guantee a loan for a Veteran?

We were just approved and yes, we were told 2 years is the wait period. Thankfully we're 3 years past our CH 7 and there were no issues.

[wvf3]

There are some very informative threads here addressing this issue. I think most of them are under the "mortgage" heading.

But, the short, simple answer is, 2 years from BK, and 3 years from a foreclosure.

I have seen it done sooner, but "it aint easy."

The great thing with waiting two years (I will be two years out from my Chapter 7 in early 2009) is that prices are predicted to keep on dropping so it doesn't make sense to buy right now anyway. That's the word I am getting from my economics friends (but you won't hear this from a real estate agent or banker who want to sell these houses now).

Good luck.

[wvf3]

Conventional loans are 2 years BK 2 years FC, currently but lately these have been tougher to get approved then in the past. FHA is 3 years from sale of the home, so it can be longer then 3 years. It can be done sooner, but you are going to have to be pretty strong as a borrower.

Nick,

I was wondering if one can qualify for FHA or VHDA (Virginia state-backed financing) 2 years after BK when no foreclosure is involved (I've never owned a home so I would like to qualify as a First Time Home Buyer). Thanks for your response.

Bill

[Boscoe]

Disney Girl, what kind of interest rate did you get 3 years out of your ch 7?

[MTG_BANKER_OH]

Disney Girl, what kind of interest rate did you get 3 years out of your ch 7?

It should be somewhere in the mid to upper 6's, depending on the program.

[MTG_BANKER_OH]

Nick,

I was wondering if one can qualify for FHA or VHDA (Virginia state-backed financing) 2 years after BK when no foreclosure is involved (I've never owned a home so I would like to qualify as a First Time Home Buyer). Thanks for your response.

Bill

I you should be ok after 2 years, as long as you have reestablished credit and have not had any negaitve credit since the BK. I am not sure about the VHDA,I only do OH, Fl, SC, and IN, but typically the state sponsored programs use the same guidelines as conventional/FHA/VA. We have a similar program here in ohio and they follow the same guidelines.

[MTG_BANKER_OH]

Will the VA also have to wait the 2 years before they guantee a loan for a Veteran?

Yes, It can be done in a year with extenuating circumstances it is similar to FHA in theat respect there is a sticky about FHA BK guidelines.

[B12]

Will the VA also have to wait the 2 years before they guantee a loan for a Veteran?

VA loan guidelines state a 2 year wait after BK for a mortgage WITH a good pay history of 12 months. The extenuating circumstances have to be out of the mortgagor's hands, like illness, etc. Always try to get a lender that does manual underwriting since a human looks at the circumstances and makes the decision.

I have had a client get a VA loan while still in chap13 but he was 3 years into his payments AND he had a good pay history for the entire time.

[DisneyGirl]

Disney Girl, what kind of interest rate did you get 3 years out of your ch 7?

6.44%