What are the chances of being approved?

[cali girl]

Here's the situation:

Chapter 7 - discharged June 2007
previously owned home - included in BK
We have no down payment
Monthly income is $5280

We are considering purchasing one of the MANY foreclosed homes in our area. They are going for about $150k - 190K. We know that we could afford our mortgage even as high as an 11% interest rate because our current rent amount is $1600 and we are doing just fine with that.

The question is - can someone pass along any lenders that would be willing to work with our situation? We have NOTHING down. I know that many of you will tell us to save and wait - but we can't save. We make enough money to pay our rent and bills. There is no extra to save.

I'm sure you're thinking, well why buy? Well, we are just considering it. It would be much better to own then rent and for the prices these homes are going for, why not?

Please give positive input - not asking for sugarcoating, but really don't need to hear any negative remarks. I'm honestly asking if there is someone out there that will lend to someone a little over 1 year out of BK with no money down. Any referrals would be appreciated.

Thanks in advance!

[imaloser]

imho - fha will be the way to go for you. but no money down will not be acceptable. if you could find a home with a ridiculously low ltv - maybe (but highly doubtful). reserves and assets will be mandatory - and that's after you have something to put down. they want to know you have something left over at the end of the month and proof of bank statements should reflect that.

you don't want to purchase a home without reserves !

[justbroke]

FHA has a program for people who have been 2 years out of Chapter 7 Bankruptcy. Who knows... with all the surplus homes on the market... maybe they'll listen?

They also have Chapter 13 re-finance and purchase options while in a Chapter 13. They do require 20% down though.

Visit the FHA Credit Issues page for more detail!

[cali girl]

Thanks everyone for your honest feedback! I just wanted to get an idea of where we stand, what obstacles we may still be facing, and where we go from here. I think I WILL wait for our 2 years to be up.

I also found out from a friend that the closest thing out there to 100% financing is actually 97% financing. So we would need to come up with at least $5700. That's not TOO bad.

I'm gonna work on some things and be patient. We are in a 2 year lease, so perhaps by May 2010, we'll look a lot better.

Thanks all!

[imaloser]

ja

the 97% financing is fha. but on top of that you have closing costs. then you have pmi. then you have taxes and insurance.

the most positive thing you can do to "set yourself up" is to begin saving. i'm a 13'er, and i have tightened my belt like you can't believe. and it shows. in one year i have managed to save 4,324.68 ! ! ! i have this in a paperless account without an atm card attached to it. it's at a local bank. when i get to 5 g's i'll put it in a cd or roth ira. they gave me a secured prime credit card against part of the savings (1500.00) which i don't use very much - gas or staples. all my statements, both checking and online savings statements have been pristine for over two years now (almost as long as i've been in the plan). no frivilous expenditures and always a surplus at the end of the month. and routine savings. in addition to that account i have "mattress money" which i keep counting over and over again - $1108.23.

it's hard to get into the groove of saving, but when you do, you'll never let go of the money ! you won't want to. oddly enough, when you go get a loan, you can tell them "i don't want to use my savings" and they'll probably agree with you!

[DisneyGirl]

We bought a home several months ago.

I agree with the posters that say you will need reserves. Otherwise you will have a hard time qualifying. This is money above and beyond down payments and closing costs. Usually two months worth of living expenses. FHA did have a program that would "gift" you the down payment here in CA but that program ended Oct. 1st. If they ever come back with it, you could look into that. It was called NEHEMIAH DOWNPAYMENT GRANT.

Also keep in mind your taxes. I don't know what county you want to buy in but some have a higher rate than others so you'll have to look into that and calculate your property taxes.

Are you in CA? I'm guessing due to your screen name. If so, are you or your spouse active military or a veteran? If so, look into the CalVet loan program.

Oh and look into new construction. Our home was new construction and we got $18,000 towards closing! It paid for everything. We paid nothing at closing except the down payment of course. We pay no PMI or anything like that. Ours is a VA and they do it different, it's due upfront or wrapped in the mortgage. Ours was paid by the seller in full. That was helpful and we got a brand new house with a really nice warranty to boot.

Edit to add: also we were told that we'd need to have at least 3 lines of credit since the BK. Two had to be at least 2 years old. So if you haven't rebuilt, now is the time to do it before you try to buy a house. And make sure your credit reports are spotless and free from errors that will slow down the process once you begin.

Best of luck! I hope you find the perfect home when you're ready!

[halloweendmb1]

FHA has a program for people who have been 2 years out of Chapter 7 Bankruptcy. Who knows... with all the surplus homes on the market... maybe they'll listen?

They also have Chapter 13 re-finance and purchase options while in a Chapter 13. They do require 20% down though.

Visit the FHA Credit Issues page for more detail!

That is not an official FHA website. all FHA websites end in .gov that is a website that offers information but their guildines are not necessarily FHA's. FHA has a 2 year waiting period