A house before two years after discharge...

[MrsLanier]

I was not actually looking into any possibility of getting a house until 2 years after my discharge. It will be a year after my discharge in September and according to some recent findings, from my significant other, (he cannot get a loan at this time) there is a such thing as getting, say, a HUD home before two years after discharge. I actually spoke to a Realtor that told me with my work history and credit score he could get me a loan for sure (i know that nothing is guaranteed.) I haven't filled out any application yet, he just told me what he thought based on the info I gave him. Last month when I checked my credit score it was about 650. He seemed to be pretty confident and believable but I'm guessing he probably cannot get me approved for a house realistically. It would be really nice to get a home now, because I figure the housing prices today would be better for a buyer than next year but I have never heard of such a thing, not even on this board and it contains the best sources of information out there. I was just wondering has anyone purchased a home before the two years after discharge and with about a 3 percent down payment on a modest starter home? The houses I was interested in were less than 110,000. Thanks for any replies!!

[Flamingo]

A good broker will be honest with you...sure there could be a possibility he/she could get you a mortgage but the percentage, fees, closing costs, etc., etc., and also the PMI you will be required to get will be very high and probably make things unrealistic. You will also be required to pay PMI for the first five years of the mortgage and that cannot be removed from your monthly payment. Depending on the amount of the mortgage, that can add quite a bit to the monthly payment - it is risk based insurance because anyone who has filed BK is a big credit risk to the lender.

Time is your friend after discharge. The longer you establish yourself as creditworthy, not apply for too much credit and rack up hard inquiries and denials, works for you. Nothing is guaranteed after discharge. Except credit denials so be prepared to encounter high fees, high interest, etc. and if it is too good to be true, it probably is.

[Logan]

I was not actually looking into any possibility of getting a house until 2 years after my discharge. It will be a year after my discharge in September and according to some recent findings, from my significant other, (he cannot get a loan at this time) there is a such thing as getting, say, a HUD home before two years after discharge. I actually spoke to a Realtor that told me with my work history and credit score he could get me a loan for sure (i know that nothing is guaranteed.) I haven't filled out any application yet, he just told me what he thought based on the info I gave him. Last month when I checked my credit score it was about 650. He seemed to be pretty confident and believable but I'm guessing he probably cannot get me approved for a house realistically. It would be really nice to get a home now, because I figure the housing prices today would be better for a buyer than next year but I have never heard of such a thing, not even on this board and it contains the best sources of information out there. I was just wondering has anyone purchased a home before the two years after discharge and with about a 3 percent down payment on a modest starter home? The houses I was interested in were less than 110,000. Thanks for any replies!!

Did you speak with a realtor or a mortgage broker? Big difference.

Yes you can buy a house with less than 2 years but you must have a strong balance sheet and a good broker. Th cost through FHA will be the same whether you're 1, 2 or 5 years out of BK since rates via FHA aren't FICO driven but of course you must meet min FICO scores.

I know this from 1st hand experience but I used to be in the mortgage business which certainly helped with my approval.

I never did close the loan which was a bummer since the mortgage guy and I worked so hard on it but I had the letter from the underwriter. The property was a short sale and the bank was dragging their feet to sell the property and I simply ran out of time.

Logan

[MrsLanier]

Thank you so very much for the information! And to answer your question Logan I spoke to a mortgage specialist who was forwarded to me by the Realtor!

[sick of debt]

It will interesting to see how you make out. Keep us updated. Did you put a previous house through bankruptcy?

[MrsLanier]

At this time I am torn between going for trying to get a house and sticking to my original plan and save more money and wait another year. As Flamingo stated if it sounds too good to be true, it usually is. I am at a crossroads. No, I never owned a home before, only rented.

[Logan]

At this time I am torn between going for trying to get a house and sticking to my original plan and save more money and wait another year. As Flamingo stated if it sounds too good to be true, it usually is. I am at a crossroads. No, I never owned a home before, only rented.

I wish I closed on the house because it was actually 2 houses on 1 property so I would have income coming in from the 2nd house.

I am renting since it is cheaper than buying but if I find a good duplex I will jump all over it. I'm coming up to 3 years out of BK so I may be able to get a loan other than FHA.

Logan

[SPalin]

Last year when I filed, my attorney told me not to worry about getting a mortgage... she has had several clients getting mortgages 6 months post discharge, so it is possible, but then it's in California and there are a few homes for sale here that Banks want to get rid of!

[nc73]

No need to rush. The housing market isn't recovering any time soon.

[MrsLanier]

Just a little update. I decided to try to go for it and the mortgage specialist is trying to shop me a loan now. I am still not getting my hopes up too much. But yes the housing market is still in a pretty atrocious state with little hope to turn around soon. (great for buying though)

[IBroke]

No need to rush. The housing market isn't recovering any time soon.

Oh, so true. I signed up at zillow.com and receive updates every time the value changes. Although the numbers are certainly off, the trend is still scary. If it continues like that, I'm wondering when you would actually havee to PAY THE BUYER to take over your house...

[GettingGoing]

Just a little update. I decided to try to go for it and the mortgage specialist is trying to shop me a loan now. I am still not getting my hopes up too much. But yes the housing market is still in a pretty atrocious state with little hope to turn around soon. (great for buying though)

Be sure to update us. I am sure a lot of people are interested in knowing your outcome. Thanks

[bk2011sfv]

Hello Spalin- I live in Los Angeles and I was encouraged to find that it is not impossible to get a mortgage after filing bk. My husband and I just started the process of filing ch 7 so hopefully we'll be done by Oct...
Situation: CC debt $46,810 Student loans combined: $45,000. Gross income combined $118,000 /year. We got into our mess due to job loss, bad financial decisions and illness (my maternity leave lasted 6 months due to my csection incision not healing until 3 months after delivery!!)

[tobee43]

we aren't in calif...but we found owner owned home....we did a rent option to buy....

we closed feb 15....100% owner financed at 5%...straight 15 years....NO BANK...NO CLOSING COST....no escrow or any other types of fees.....

so now we own again!!.....

[SPalin]

Hello Spalin- I live in Los Angeles and I was encouraged to find that it is not impossible to get a mortgage after filing bk. My husband and I just started the process of filing ch 7 so hopefully we'll be done by Oct...
Situation: CC debt $46,810 Student loans combined: $45,000. Gross income combined $118,000 /year. We got into our mess due to job loss, bad financial decisions and illness (my maternity leave lasted 6 months due to my csection incision not healing until 3 months after delivery!!)

Yes it is encouraging... I'm looking at owner financed (way to go Tobee!), but a broker did tell me I do qualify for a mortgage and only one year post discharged! I might wait one more year as prices still haven't hit bottom in Cali, especially in Fresno! Also, I might be doing a job transfer in the State, so I'm in a waiting game... also my current residence that I'm renting is going into foreclosure (that is how I found out I qualified for a mortgage, talking to the broker), but looking to see if I get Cash for Keys to move and pocket the funds to buy next year, (still hasn't been sold)!

If your student loans were current and not pass due, that will help you recover from the bankruptcy faster! I had my student loan for 7 years before the Bk, so that helped show on-time payments for the past 8 years, also old mortgages that were paid in full. Time is your best friend, don't rush back into a bad situation and start the nightmare all over again!