The MOST Frustrating Aspect of BK for ME

[danaf]

Is that there are so many homes being sold for below market values and I cannot buy one even though I can afford it. It is killing me!

Seriously - really nice homes selling for 100k and below. Filing was the best thing I EVER did but who knew THIS would happen to the housing market!?

I just have to take deep breaths.

There is a program I found called NACA. So there may be a possibility I can buy a year out of bk rather than two. I just have to keep the faith.

[DisneyGirl]

Good luck and I hope you can take advantage of the lower home prices!!

[imoverit]

NACA? What is that and what do you know about it? We are in the "preparation phases" and are walking away from our house.... I am completely bummed that we will have to rent and the sooner we can buy again the happier I will be!

[HHM]

Is that there are so many homes being sold for below market values and I cannot buy one even though I can afford it. It is killing me!

Seriously - really nice homes selling for 100k and below. Filing was the best thing I EVER did but who knew THIS would happen to the housing market!?

I just have to take deep breaths.

There is a program I found called NACA. So there may be a possibility I can buy a year out of bk rather than two. I just have to keep the faith.

The decline is not over, don't worry about, there is absolutely nothing on the horizon that is going to turn around the housing market.

Actually a BK does not, by itself, preclude you from buying a house now but don't mentally trick yourself, unless you can put 10%+ down, you CANNOT afford the house.

[Flamingo]

I am sometimes amazed when folks think buying a home after BK is going to be a walk in the park or even an option. Having a BK on your credit report is the worst thing that can happen to one's credit and it can devistate one's credit for many years as most of us have found out. Just because one is now debt free from filing (Chapter 7) or after several years in a Chapter 13 does not mean one is going to qualify for anything. I am just stating this because so many people get their hopes up to end up getting denial after denial even though they were told many times that would probably happen. Here is the link to the NACA Program - sounds a bit complicated and there is a lot involved...

https://www.naca.com/members/purchaseStep.jsp

[hereforinfo]

You will need at least 10-20% down, plus closing costs to qualify for a mortgage right now - if you have excellent credit. Having a recent bankruptcy or foreclosure will make it nearly impossible to get a mortgage for a long time.

[HHM]

I am sometimes amazed when folks think buying a home after BK is going to be a walk in the park or even an option. Having a BK on your credit report is the worst thing that can happen to one's credit and it can devistate one's credit for many years as most of us have found out. Just because one is now debt free from filing (Chapter 7) or after several years in a Chapter 13 does not mean one is going to qualify for anything. I am just stating this because so many people get their hopes up to end up getting denial after denial even though they were told many times that would probably happen. Here is the link to the NACA Program - sounds a bit complicated and there is a lot involved...

https://www.naca.com/members/purchaseStep.jsp

Yes and no...but I disagree, a BK is NOT the WORST thing that can happen to your credit. For many in BK, and several on this forum, their credit IMPROVED as a result of the BK.

In any event, as with any lending, the main issue is can you afford the payment all things considered. Lenders have tightened their standards, but if you walk into a mortgage lender with 20% down, have a steady job history, and the payment for the loan you want is 28% or less of your monthly gross income, you will get a mortgage. The people that are getting their hopes up are the ones that actually can't afford a house regardless if they had a BK.

[Never_Again]

Lenders have tightened their standards, but if you walk into a mortgage lender with 20% down, have a steady job history, and the payment for the loan you want is 28% or less of your monthly gross income, you will get a mortgage. The people that are getting their hopes up are the ones that actually can't afford a house regardless if they had a BK.

Very true, but don't forget VERIFIABLE income, either from a job with pay stubs, or tax returns with an income sufficient to hit that 28% mark.

[Flamingo]

Yes and no...but I disagree, a BK is NOT the WORST thing that can happen to your credit. For many in BK, and several on this forum, their credit IMPROVED as a result of the BK.

In any event, as with any lending, the main issue is can you afford the payment all things considered. Lenders have tightened their standards, but if you walk into a mortgage lender with 20% down, have a steady job history, and the payment for the loan you want is 28% or less of your monthly gross income, you will get a mortgage. The people that are getting their hopes up are the ones that actually can't afford a house regardless if they had a BK.

Almost everyone in the financial world that I have talked to and worked with and also almost every financial site around indicates that bankruptcy, followed by repossession or foreclosure, is the worst black mark ever on one's credit history - it is a big black mark on one's credit and when viewed by a creditor, can be an instant denial even if one is working to rebuild their credit and has a good score and back on their feet financially. A major magazine (Time or Newsweek, cannot remember which one) did an article several weeks ago as to bankruptcy and this economy and how it is the last thing anyone should do because of how it wrecks your credit. Anyone who has filed it or been through it knows that and while some may have experienced otherwise, the majority suffer in many ways during the time that BK is on one's credit history.

I am just stating this as pure fact and not as a reason to avoid filing because if you need to file BK you need to file BK. It is not the end of the world but it's just that some people think that while it is the answer to their present financial problems or situation, that they will easily be able to get a mortgage or credit right after or shortly after discharge. Reality can be tough after going through a BK.

[Logan]

Is that there are so many homes being sold for below market values and I cannot buy one even though I can afford it. It is killing me!

Seriously - really nice homes selling for 100k and below. Filing was the best thing I EVER did but who knew THIS would happen to the housing market!?

I just have to take deep breaths.

There is a program I found called NACA. So there may be a possibility I can buy a year out of bk rather than two. I just have to keep the faith.

Don't worry about what you can buy a house for today. What if you didn't have to declare BK and you bought a house 3 years ago. What would it be worth today?

Say house prices go up 10% by the time you're ready to buy. If you've been saving for a down payment the savings you will get with a better loan and the lack of money going out to fix you're new home with repairs will outweigh that 10% increase.

I could easily afford a home today but I have less than 10% to put down on a home. I am saving the best I can so I can put closer to 20% down so that I can avoid PMI which is an added cost. Even though I may miss the bottom I will still buy a home near current lows and I will have a much better loan.

Good luck,

Logan

[danaf]

It is not the end of the world but it's just that some people think that while it is the answer to their present financial problems or situation, that they will easily be able to get a mortgage or credit right after or shortly after discharge. Reality can be tough after going through a BK.

HHM - thanks for the encouragement. Owning my own home is a dream....and esp. if I can do so for less than what I pay for rent now. Something to work on.

Flamingo - reality of filing bk is tough however obtaining good credit is not impossible. Less than a month after my 7 discharged I got approved for an NFCU card, no annual fees - no fees period - for 5k @ a 14% interest rate..their nRewards card. Why I got this, not sure. Maybe cause' I've been a long standing member with them, never bk'd anything of theirs, always paid everything off on time or early. I also had a cc card and a large line of credit with them yrs ago that I closed (at the time was uneducated about cr's). In any event - I am living proof that it is possible to get good credit soon out of bk. I also have other cards like Macy's, Nordstroms ect. that did not close as a result of my bk.

I wish I could get a mortgage TODAY but I know I can't and won't even try yet cause' I don't want that ding on my cr. Doesn't mean though that it won't be possible in the near future. I just need to have more money and more patience. It will happen - sooner rather than later I hope.

[hereforinfo]

I wouldn't consider 14% interest a good deal. Good credit = 0% interest on a credit card. Besides, a credit card with a $5k limit is easier to come by and a lot less risky than a 6 figure mortgage.

[Flamingo]

[QUOTE=danaf;230082Flamingo - reality of filing bk is tough however obtaining good credit is not impossible. Less than a month after my 7 discharged I got approved for an NFCU card, no annual fees - no fees period - for 5k @ a 14% interest rate..their nRewards card. Why I got this, not sure. Maybe cause' I've been a long standing member with them, never bk'd anything of theirs, always paid everything off on time or early. I also had a cc card and a large line of credit with them yrs ago that I closed (at the time was uneducated about cr's). In any event - I am living proof that it is possible to get good credit soon out of bk. I also have other cards like Macy's, Nordstroms ect. that did not close as a result of my bk.

I wish I could get a mortgage TODAY but I know I can't and won't even try yet cause' I don't want that ding on my cr. Doesn't mean though that it won't be possible in the near future. I just need to have more money and more patience. It will happen - sooner rather than later I hope.[/QUOTE]

Everyone's situation when it comes to credit out of BK is different. I too am living proof of even getting 0% financing on a brand new vehicle prior to discharge is possible (Chapter 13). However, we all do not qualify for everything after BK (even us) and we all get more denials than acceptances. We had a DressBarn card survive BK (zero balance) and six years later they cancel it due to a BK on our records, and I utilized it several times over the past six years to keep it open and they closed it with a zero balance, paid on time, just due to the BK filed almost 7 years ago. It is always good to have a positive outlook; just keep in mind that a BK on your record is a BK on your record and it is easy to fool yourself that you are immune to the denials when you receive several acceptances. I am sure it will all work out for you since you have a great goal and attitude but until that BK is off your record, it can hurt you when you least expect it, even several years down the road.