Couple questions could not find answers to

[michaelrj9]

I have read a lot of posts and all the "Stickies" but could not find answers to these questions after a BK.

My goal is to get a house ASAP.

How many credit cards should a person get to help repair credit. I don't want to get a car loan if possible. I would rather save that money.

Currenty I have 1 secured card from Orchard bank with a 100.00 limit. I put 19.99 on there each month but pay it off each month.

My Fico score went up 52 points in the last three months now at 653 (before BK it was in the 780-800 range with a top score of 825 a couple years ago

Is 1 credit card good enough to rebuild your credit to get a house?

Do you have to have unsecured cards or can I stick with a secured card (s)? I would rather stick with secured cards if possible (to keep my self out of trouble hopefully) because it is my own money.

Is there a credit limit that a person should have to help rebuild credit on the credit card?

In this current US economy crisis is it still possible to get a house in the 1-2 year range? How much more would the intrest rate be with not so excellent credit 1-2% etc. How about Job length? Downpayment?

I have read all the "Stickies" but the are very old. I know under normal circumstances the principal is the same but wanted to make sure.

One sugestion would be to update the "Stickies" even if everything still applies. I think when "newbies" like my self see that they are 3-6 years old they just still wonder


Thanks for all your help

Michael

[Flamingo]

Micheal - there is no guarantee anyone after filing bankruptcy will be able to get a house/mortgage. Many people are able after a few years to obtain a FHA loan after being pristine with their credit during that time and then there are those that are in the same boat but just will not qualify. There is no magic wand or silver bullet to this. Time is one's friend after filing. Being prudent with credit after discharge and paying all billls on time (i.e., rent, utilities, etc.) over the years following discharge provide a prospective lender with a picture of the borrower as being creditworthy again. Applying for too much credit after discharge looks bad.

There are numerous postings as to my advice above in this forum. While rigiht now there are many incentives out there for home buyers, one needs to know that a recent bankruptcy filing on one's records with little passage of time after discharge (i.e., two or more years) will more than likely keep them from getting any kind of mortgage.

[StartingOver08]

OP, it sounds like you are asking about underwriting criteria for a new mortgage. The lenders are rapidly changing the underwriting criteria to make it a little more difficult to obtain a loan. Changes include a min credit score of 620 for FHA loans. Individual lenders are allowed to increase the miniumum requirements.

The changes also include reduction in debt to income limits. Fannie mae, freddie mac and FHA have tightened the limits again this month, they are now 49% or less. Most of us that are in this position (having filed/been discharged from BK) would no longer consider being anywhere close to 49% anyway! The DTI limits seem to be headed back to where we were years ago: 38% to 44%. (The last sentance is an opinion based on a pattern I am noticing over the last few years).

In the past to obtain a FHA loan the borrower needed at least 4 lines of credit and FHA will accept alternate lines, like electric payments and utility payments. You may want to have at least one more credit card to rebuild your score.

The biggest change is how long the time period is between your discharge and being able to puchase if you lose a home in the BK or FC.

Research the underwriting criteria yourself for FHA so you can make sure your credit profile and financials meet the criteria. One of the best sites is HUD.gov to get information directly about FHA loans. The best thing you can do is save for a large downpayment and all of your own closing costs. Right now the min FHA downpayment is 3.5% if you have substantially more to put down and you borrow less, naturally your file will be much more strong.

Don't lose hope. If you get really strong at savings you may not need the bank at all to own a home! Good luck.

[awayalways]

I got 2 unsecured cc's after discharge. Then 9 months later was approved for a USDA mortgage at 5.5%. My middle FICO at that time was 663. Lender wanted 2 years verifiable employment in same field. Mortgages are not like auto loans or cc's. If your approved the rate is usually competitive. Time after BK is constantly changing as SO08 said but a good min rule of thumb is;

VA/USDA after discharge w/$0 down
FHA 2 years after discharge w/3.5% down
Conven 3 years after discharge w/10% down