Post BK Home Buying Experience

[CindyLou]

The 3 percent downpayment grant...The govt is giving that to you for free?

Its through a non profit foundation called Nehemiah. The seller agrees to make a donation to the foundation in the same amount as the down payment grant. There are no income limits on this grant program. However, if you are within 100-120% of the median income of your county, there are many programs that do not require seller participation. Its a pretty common program used in my area and so its common in offers and familiar with agents....

30 year fixed at 6 percent is pretty good. Did they say how much mortage (with everything included like insurance, etc...) is each month?

Principle and Interest - 1744 (291,000 financed on principle)
Mortgage Insurance - 121 (.5%/12 months)
Homeowner Insurance - 66
Property Taxes 312 (1.25%/12months)
------------------------------------------------
Total 2243

Who did you go through? Lending tree or was it through wells fargo? How long did it take.

Initially put in my screening app through lending tree, and made contact with a few lenders including Wells Fargo. I ended up going with Wells Fargo, but did start over with a new broker and a brand new app through a referral from a friend after a few weeks of being out of town and restarting my app. She had done a loan for him. He had a previous BK too. Lending tree did give me a few good leads, but if I had to do over again I would only do word of mouth referrals. My phone rang waaaaayyy too much from the lending tree app!!

Sorry for all the questions. I'm just trying to understand so that way when my time comes, i would know something rather than nothing.

Ask anything you want! That is why I started the thread. I think the more info we all have the better we are armed to get good rates.

[MTG_BANKER_OH]

congrats Cindy. happy house shopping. Just a quick question:

The 3 percent downpayment grant...The govt is giving that to you for free?

30 year fixed at 6 percent is pretty good. Did they say how much mortage (with everything included like insurance, etc...) is each month?

Who did you go through? Lending tree or was it through wells fargo? How long did it take.

Sorry for all the questions. I'm just trying to understand so that way when my time comes, i would know something rather than nothing.

Thanks again and congrats.

The rate is good, the 3% gift comes from the seller. By way of them givinng the charity 3%. It is a roundabout way to transfer money to a buyer. Technically you end up paying 3% more for the house because the seller is going to want to recoup the money, but that is how about 75% of FHA deals are done with zero down. The HUD said they would not accept this type of down payment assistance after April I believe. They are tryinng to close the loophole, this is in court currently with the non profit organizations and HUD.

I think your scores were pretty good, but come January 1, FHA will be going to a credit scoring/risk based pricing. With less then a 620 score you will have to hav your own down payment or get a gift from a relative for the 3% down. No more non profit organizations for down payment with scores under 620. With no credit score you are going to need 5% down.

You can read up on it here: http://www.fha.gov/about/07-4651.pdf


Also lenders are coming out with credit score adjustments for all conventional loans. Roughly if you have less then a 660 score your rate will be about .625 higher. Things are changing and credit scores are going to be everything in the future, all banks are loosing money and they are trying to recoup losses.

[SinkingFast]

Cindy,..............

I took the liberty of changing the Title of your thread.

I've also posted this thread as a Sticky. Easy access for future reference as others get to this stage.

Many Thanks to Cindy and Nick (Mtg_Banker_OH) for all the valuable info they've posted in this thread.

[CindyLou]

Sinkingfast,
Thanks for making the Sticky!

Nick,
Can you answer a couple of questions: When is the case number assigned to a loan? The reason I ask is because the document you linked says the new rules apply to all loans assigned a case number after Jan. 8, 2008. Under these guidelines I will have to pay .05% more on my upfront fees due to the 3% grant if the case number is not assigned until after the 1st of the year. Hopefully the case number is assigned when the loan is approved or at least when the house enters escrow.

The second question is in relation to the pre purchase counseling. It refers to a discount for those to participate. Does this discount decrease the numbers as listed on the chart?

Thanks for your help.

Oh, and just an update: We did find a house yesterday that we absolutely love. It is listed for 300,000, very nice, well kept and has all the features we like. The one we found last week already had an offer before we got to it. I am just waiting to hear from my employer re: whether we are getting our bonuses for 07 before we make an offer. I want to be 100% sure we have enough cash going into this. My bonus is around $10,000....so keep your fingers crossed. This won't make or break the decision, but it will make it much easier to make the offer with confidence.

I was telling my husband yesterday that 10 years ago I would have jumped into this feet first without even testing the water. Things have changed so much. I am so much more careful. He is so carefree and just goes along with me....kills me. At least he doesn't go against me, I guess.

Cindy

[Logan]

ARMs are what are getting people in trouble lately.

I suggest staying FAR FAR FAR away from ARMs.

Buying a house that you can't afford is getting people in trouble not the ARM. Cindy qualified for a 30 year and if you can get a lower rate on the first and pay the 2nd down faster then you're way ahead. If you tame the savings and buy a plasma tv then you're in trouble.

Logan

[CindyLou]

Buying a house that you can't afford is getting people in trouble not the ARM. Cindy qualified for a 30 year and if you can get a lower rate on the first and pay the 2nd down faster then you're way ahead. If you tame the savings and buy a plasma tv then you're in trouble.

Logan

With interest rates so low, I wouldn't want to do anything but lock into a great low rate. With all I've been through financially and I couldn't even fathom the possibiity of taking on an ARM and not being in control of my mortgage payment. I need stability and consistentcy. An ARM for me, is like taking a gamble and quite honestly, just buying house is enough of a gamble for me. I will play it safe, keep the 30 year fixed. BTW, I won't have a second mortage. Only the one....and I already have a Plasma.... wink wink

[RickInMich]

cindylynnsmith, I was curious. In your bankruptcy, did you let a home go into foreclosure? I'm wondering if someone who had a bankruptcy and foreclosure (at the same time) would have similar success. Congratulations on great situation!!!

[CindyLou]

No, fortunately I had sold my home a few years prior to bk. But the FHA guidelines do add on an extra year to the process if there is a foreclosure. So instead of the 2 year wait, there is a 3 year wait.

[BKer]

This is my experience from another thread. I hope this helps you out! Feel free to PM if you have any questions. I included 2 homes in my Ch 7 BK and was discharged October 2005. I bought my home August 2007.

"Well, it took a lot of calling around, networking, and praying, but I received my approval for a home loan. I posted a question on yahoo answers and one person responded with the obvious that I didn't think of...ask your local realtor (we have known her for 7 yrs, now she's the broker) that you work with. Well I called her and she's like no problem and referred me to her loan officer for C21. The C21 mortgage guy was pretty unsure what to do (I was familiar with that) and he said "let's call the underwriter directly and put him on a 3-way". The underwriter and I talked for 90-min. He was asking me what happened, etc and told my wife and I that he was really impressed that after 20-mos following a BK our scores were 676 and 707, respectively. He also liked that we already established $30K unsecured credit. After all the discussion, he put us hold and came back saying we are approved. I didn't believe it, but early the next morning I rec'd my truth in lending and all other docs.

So...our loan is an 80/15/5 for $250K, 30-yr fix. The 80 is at 6.1% and the 15% is 7.5%. No docs needed other than 2 paychecks and 2 bank statements. He didn't even want to see the discharge, rental history, etc. There is no PMI and my only fee is the 1% origination fee.

After Quicken and NationPoint had been giving me a hard time, they called back yesterday afternoon saying that I was approved. Their numbers were really horrible. NationPoint had over $10K in closing costs. Quicken wanted me to buy down 3 points and pay 9% interest.

Makes me wonder...is NationPoint and Quicken taking advantage of us BK folks?

The C21 program I went through was called LandScape. It looks at your whole financial situation. Per C21, only they have it. I don't know that to be true.

Hope this experience helps someone else!"

[rrockinggramma]

I wonder if this program is still with C21 (that is Century 21 right?)

hmmmmm, maybe will call Monday and find out.

[CindyLou]

The only thing I would add is that a lot has changed since Aug. 07 in the lending industry. What a difference 3 months makes! But am going to even check into this myself and see what they have to offer before I seal this deal. Thanks for the info!!!

Bker, what state are you in?

[MTG_BANKER_OH]

Sinkingfast,
Thanks for making the Sticky!

Nick,
Can you answer a couple of questions: When is the case number assigned to a loan? The reason I ask is because the document you linked says the new rules apply to all loans assigned a case number after Jan. 8, 2008. Under these guidelines I will have to pay .05% more on my upfront fees due to the 3% grant if the case number is not assigned until after the 1st of the year. Hopefully the case number is assigned when the loan is approved or at least when the house enters escrow.

The second question is in relation to the pre purchase counseling. It refers to a discount for those to participate. Does this discount decrease the numbers as listed on the chart?

Thanks for your help.

Oh, and just an update: We did find a house yesterday that we absolutely love. It is listed for 300,000, very nice, well kept and has all the features we like. The one we found last week already had an offer before we got to it. I am just waiting to hear from my employer re: whether we are getting our bonuses for 07 before we make an offer. I want to be 100% sure we have enough cash going into this. My bonus is around $10,000....so keep your fingers crossed. This won't make or break the decision, but it will make it much easier to make the offer with confidence.

I was telling my husband yesterday that 10 years ago I would have jumped into this feet first without even testing the water. Things have changed so much. I am so much more careful. He is so carefree and just goes along with me....kills me. At least he doesn't go against me, I guess.

Cindy

The case number will be assigned when you find a property it should happen as soon as the contract is accepted, it just depends on who you are working with. When you request a case number your lender has to have chosen an appraiser for the loan. They have to enter the information for the appriaser into the request form. When you request a case number for FHA they run a caivers report to see if you are delinquent on any government debt, if so it would have to be paid or you will not get approved.

I honestly do not know anything about pre purchase counseling, that is something new for next year.

[BKer]

Hi, Sorry it took so long for me to get back. I had to put my dog down and it was by far the toughest thing I ever had to go through.

Anyhow, I used the C21 program in WA state. I understand its nationwide though. My parents used it 2 months on ago on a refi of their home in PA.

I hope it works out for you all!

[sandhall]

Bker i put my sweet baby missy down yesterday. I so agree it was one of the hardest things in life. She was 13 yrs old and i knew she was in pain.

I guess i am in a catch 22 we did a chapter 13 in may 2006 we converted to a 7 aug 2007 but my credit reflects a chapter 7 in may 26 2006 and i have ask for a update but of course they says it is correct even with me sending them in the court papers. So when this do i respectively have to wait till 2009 to get a good rate. right now before discharge i have a 650 640 630. everything on my credit as of now is reporting correctly but the bk. I figure by the end of 2008 i could have 20% down. And maybe have a score of 670's. We don't have car payments nor will we need cars over the next 5 yrs. I just really don't want to rent till the end of 2009 because we are moving to a new state in march of 08 and really would like to look to buy at the end of the yr. any ideas i could do a first time buyer program but my hubby couldn't just hoping that i don't have to live with inlaws till 2009 LOL

[CindyLou]

Update: Whew this house hunting thing is hard! Especially since we are shopping 60 miles from our current residence!

Made another offer today. We had backed out on the last one because their were questions regarding the working condition of the pool and the owner did not want to "un" winterize it for inpsection. Big red flag!

Anyway made another offer today and here is what we did.
3 BR 2.5 BA 2157 S. F. listing price: $282,000 (sold for $380,000 in '06 and is now bank owned) Great condition, just needs a little paint upstairs...maybe new appliances in kitchen for cosmetic reasons only.

We offered listing price and ask for seller to pay all closing costs, which comes out to almost exactly 6%...$16,900 In CA you can ask a seller to pay everything on FHA, including the prepaids (taxes, insurance, etc).

We have also asked the seller to make a 3%...$8460 contribution to the Nehemiah program so that we can recieve the downpayment grant.

Our realestate agent is anticipating a probable counter offer increasing the asking price by 3% to cover the grant. We'll see. The comps in the area are all in $350-380,000 range. Even though this is a bank owned property, this lender is willing to work with FHA buyers.

I'll keep my fingers crossed for no counter offer ...we want a YES!

Hopefully we'll know something by friday! I want to get my FHA case number before Jan 1 to avoid the additional up front fee of .5% due to the grant gift changes in the new regs....