Chapter 7, FHA and approval under 2 years

[Logan]

I was approved for a loan a few weeks ago prior to my 2 years out of discharge. Yesterday I put an offer in for a home and if it's accepted I will be looking for a loan commitment prior to 2 years out of discharge.

The loan officer has 15 years experience, has seen my file and has spoken to the underwriter directly and everyone says it can be done.

There is life out of BK!!!

Logan

[Tom_Mi]

Did you have a house in your name when you filed, or have you been renting all this time? If you had a house, how did you get rid of it? (sale/short sale/deed-in-lieu/surrender/foreclosure)

Many thanks,
-t

[Logan]

I haven't owned a house since 2003.

[Tom_Mi]

I haven't owned a house since 2003.

Understood. Thanks... and congrats on the house!

[Logan]

Understood. Thanks... and congrats on the house!

Thanks,

It is a short sale so it may be a few weeks before I know....

Logan

[jespencer]

When was your BK discharged?

[Logan]

When was your BK discharged?

September 24th, 2007.

[oldhack]

September 24th, 2007.

It will be interesting to know if you can close prior to 9/24/09. Please keep us informed.

[Flamingo]

Can you advise your rate, fees and PMI?

[Logan]

Can you advise your rate, fees and PMI?

I'm not locked in and I'm buying the rate down 2 points and it should be in the 4.5% to 4.75% range on a 415K loan. I was sent a GFE at 4.75 and later in the day the rates improved but since then they have worsened. They will go up and they will go down so once I have a closing date we will lock when appropriate.

Fees are standard and PMI will be .55 since I'm financing 96.5%.

Rate, fees and pmi are no different than anyone else with better credit or no BK on their record. In fact, a buddy of mine with a FICO over 800 was thinking of going FHA so he could put down only 3.5% and everything is exactly the same for him as it is for me.

If the bank accepts my offer for the property I will post when I get the commitment letter.


Logan
I should add that I'm probably paying an extra .5% in fees on the back end (hard to tell for sure without shopping) but I don't care since the deserves it if he closes before the 2 year mark and he knows it will be difficult to shop him.

[LSUTiger32]

You are getting 4.75% on an FHA? That sounds extremely low!

[Logan]

You are getting 4.75% on an FHA? That sounds extremely low!

Have you applied for for an FHA loan recently?

[imoverit]

Can you fill us in on Debt/Income ratio? I'm wondering if you had a sort of compensating factor that overrides the 2 year FHA rule? Or is that rule more of a "guideline"

[LSUTiger32]

Have you applied for for an FHA loan recently?

Yeah as in right now, pre-BK. The rate is no where near that low right now. I think 5.25% was the lowest if I paid a ton of fees. I am not saying that you are wrong I am just saying that it's extremely low. Even conventional loans are coming back near 5%. FHA is always higher.

[Logan]

Yeah as in right now, pre-BK. The rate is no where near that low right now. I think 5.25% was the lowest if I paid a ton of fees. I am not saying that you are wrong I am just saying that it's extremely low. Even conventional loans are coming back near 5%. FHA is always higher.

Rates have gone up since my quote but they should come back down. If you read my post I did say I'm paying a couple of points. Actually, I'm having the seller pay 6% closing costs so I will have no out of pocket fees except for 3.5% down.

Remember that the rate quoted is only good at that moment---they go up and they go down. Unfortunately for me I was quoted on a very good day to lock. The good news is that I'm borrowing from my 401K to help with the down payment and my 401K is up 10% since that quote.

Logan

PS...Call Amerisave and see what they have for a rate. I'm not using them but they are very competitive.