Buying a house after Bankruptcy

[Sara]

Our Ch. 7 was cleared in Nov. 2003. We are currently saving for a down payment for a home. We have read that we will need 20% down and that our ch. 7 will have to be cleared for 2 years. Is this true? We currently have not opened any credit cards, and our cars are paid for. We are making monthly payments on our student loans.
What steps do we need to do to ensure that we can get approved for a house loan?

[HRx]

Our Ch. 7 was cleared in Nov. 2003. We are currently saving for a down payment for a home. We have read that we will need 20% down and that our ch. 7 will have to be cleared for 2 years. Is this true? We currently have not opened any credit cards, and our cars are paid for. We are making monthly payments on our student loans.
What steps do we need to do to ensure that we can get approved for a house loan?

Keep doing what you're doing. It would also be useful each of you to open upon one credit card account, and make the monthly payments to boost up your credit scores. Lenders want to see that you have a current payment history and a mininum credit score before they'll typically touch you.

Good Luck!

[laz]

Sara,
you need to pull your credit history from all 3 CRAs and make sure everything is correct. If there are errors, you need to dispute them.

After all errors are cleared, you want to apply to a credit card, or if you have a friend or relative who can add you as a "authorized user" on their account, within 6months that should help boost your FICO score up.



Todd, I've sent you a PM, but haven't received a reply, can you check your PM box please.

[ali-dcsmortgage]

Sara,

First off, good thing you have taken an initiative in getting yourself financially stable again.

Now, as far as purchasing a home after bankruptcy, it is true that banks will not let you do that for 2 years. However, with non-conforming lenders, you qualify for purchasing a home 1 day out of bankruptcy. Now as far as a down payment, depending on your FICO scores, you can qualify for a 85% all the way to a 100% financing loan. The programs are very competitive as non-conforming loans have been showing less risk in the past few years. Currently the rates and programs are better than that of conforming loans. Your dreams of owning a home are closer than you can imagine! Good luck!

Glad to help,

Ali Razavi

[jambala]

mortgage after BK

Sara:

There seem to be a misconception that after filing BK, you have to wait 2 yrs before you are able to get a mortgage. This is often not true. There are lenders (you just have to know where to look) that will gladly give you a mortgage 1 day after your discharge.

If you have a 600 scores and above, able to go FULL DOC (proof income that is), you can get 100% LTV. These lenders will even allow the seller to help you with part of the closing cost too.

Same thing if you have had a foreclosure in your history. The key is 600 FICO and above and ability to proof income.

If scores are below 600, you are looking at 80% LTV.

So there definitely is life after BK. Clean up all the wrong info onthe report, re-establish with a couple of credit cards, even if they are secured, they help build those scores back up.

JJ

[trish92]

Sara,
Even though you have a 500 fico score you can still get a loan for a home for a 80 LTV or if you have a 580 fico you can get a 100 % LTV all you have to do is to get a good Loan officer who's willing to help you and shop around and get a better interest rate.

Trish

[robivi3]

What are your experiences? Mortgage after BK.

I want hear from someone who has done it. My scores are 630 and i have major equity. We are out of land in South Florida and home prices have more than doubled in four years. I paid 86900 for our townhome in 2001 and they are now going for a little over 200000 and take less than a day to sell. People are scrambling to get anything that they can.

My coworkers home in Davie was 210000 in 2001 and the neighbors house which is not as nice as his just sold for 400000 in less than a week.

But what are your experiences. I have never been late payments on the Mortgage.

[EdytaHome]

Jambala,
Can you give some of your secrets away, what companies are willing to finance under those terms? Were does one look?

[himey64]

now is a great time to purchase a home. If you are paying your student loans on time you could be eligible for as little as 5% down with great rates. As mentioned above, it would be best to re-establish with a low balance credit card but also keep in mind that there are steps you can take to make your credit score skyrocket. One example: open a credit card (secured or unsecured) but whatever balance you charge, make sure you pay it off each month by or before the due date. Visit http://www.bankruptcy-library.com for more credit tips.

[Jason(Kentucky)]

So how hard is it to get your FICO score above 600 after a Ch. 7? Realistically, if you do everthing right, how long would it take? And what rates would you qualify for? (ie: if the market is at 6% fixed 30 yr, could you qualify for 6, 7, 8%?)
Thanks

[Laura]

Excellent Home Buying Program

Sara,

I worked for a mortgage company for 5 years which specialized in servicing first-time homebuyer loans which banks all over the country originated through state housing finance authority programs. Every state in the U.S. has a state housing finance authority which provides funding for mortgage programs for first-time homebuyers (among other programs). These programs have below-market interest rates, low downpayment requirements (some offer substantial downpayment assistance) and the credit standards are not too harsh. You can obtain an FHA loan through one of these programs two years after your bankruptcy is discharged (as long as you've re-established your credit). Go to http://www.ncsha.org/section.cfm/4/39 for a listing of state housing finance agencies.

Hope this helps!

Laura

[robivi3]

But who has actually done it with a score of around 600. That is the person i would like to hear from.

[MortgageBanker1]

Robivi, Sara and anybody looking for info on refinancing or buying a home after bankruptcy. I am a mortgage banker located in NY and do financing for homeowners in over 38 states nationwide. I have closed many loans with people after bks including my own refinances. With a 600 score in the sub prime market your are looked at as A+ borrower, and with as much equity in your home as you say you anybank should be fighting for that loan and getting you the best interest rate around. I recently closed a loan with a borrower just out of bankruptcy with a 580 score and got them 7.5% 30 year fixed which dropped there interest 1.5% from what they originally had. I deal with over 100 diffrent banks and am myself a banker so if you need anymore information on this or want a free credit check and report with consultation on your next move to securing a financially sound future contact me at:

Mike Armella
Senior Mortgage Banker


Good luck to all contact me anytime i am available 24/7.

[cscooper]

True. If you can keep a 580 score through your bankruptcy, or build up to that after the BK, you can qualify for 100% financing very quickly, if not immediately. If your scores are lower, you'll need a downpayment. As a national loan officer, I work hard to help you through all the options available to you and explain in human language what might be in your best interest, given your needs and circumstances.

Also, some tips to keep in mind. If you are facing, but have not yet filed bankruptcy:

1. Keep some open lines of credit, or loans THROUGH your BK. You don't have to include EVERY account in your BK. This will help you keep a better score, so that rebuilding credit won't be as difficult. For example, you have a car. It's the only account you've always paid on time. DON'T include it in your BK. Keep the car. Continue your excellent track record and your scores will stay higher through the BK. Applying for credit or a home loan will be much easier then.

2. You've heard it a thousand times. Get a secured credit card. Preferably one that reports to ALL 3 agencies and one that reports as UNSECURED. Use it! Pay it off every month ON TIME, EVERY TIME. I'm currently researching some of the best cards that meet this criteria. I'll have it on my website soon.

There are a few more things you could/should do, but these two will help you get back up after a BK.

I am a lender as well as a mortgage broker. I have every program in the book available for getting financing for bad credit situations. I shop several other nationlenders for you with just ONE credit pull. This means you don't have to shop and destroy your credit further by having everyone in the world pull your credit. Despite popular misconception, almost every credit report I look at says "score was adversely affected by credit inquiries."

Best of luck!

[GCPD911]

I Purchase A Veh In Feb Last Year With The Understanding That It Was To Be Reported To My Credit Now Im Trying To Buy A Home And Its Not Listed I Called The Car Dealer And They Said It Cost To Much Money To Buy The Software Now And They Will Give Me A Letter If Needed ...i Have Two Small Credit Cards And That Is It ...how Can I Get My Scores To Go Higher? And Will That Letter Help