I thought this info might be helpful to those out there trying to repair their credit and/or get approved for a home loan while currently in a Ch 13.
About 6 months ago, I set out to try and repair my credit. Because I wasn't allowed to get a credit card, I went with a credit repair company called Lexington Law. They basically just challenge every single negative thing on your report. They do this over and over until the bureaus remove the items. Don't ask me how this stuff is verified through the bureaus, all I know is I paid them about $50 per month to get working on it. In four short months, Lexington got a handful of negative items removed and my TransUnion score went from a 608 to a 636.
I went through all this because my goal was to get pre-approved for a home loan.
Just so everyone knows (because I know there are some misconceptions out there), it is possible to get approval for a home loan while currently in a Ch 13. Typically, the only type of loan that one can get is an FHA loan (which is what I got). You just need to find a bank that handles FHA loans. Here are the requirements.
(1) At least 1 year of your plan complete
(2) Middle FICO score of 620 or better (of the TransUnion, Equifax, and Experian scores, the bank will use the middle score)
(3) Documented proof of being on time with trustee payments
That's it.
Once you get pre-approved, you'll have to supply a written letter of approval to incur new debt from the trustee to the bank before you can make an offer on a house.
Obviously, the biggest hurdles are getting the negative items removed from your report, and getting approval from the trustee to incur new debt. Some trustees are very strict in that regard, and some aren't.
Thus, yesterday I was pre-approved for $210,000 at 4.25% with a minimum of 3.5% down. Now, I'm just waiting on the written letter from my trustee.
I hope this helps people who are looking to purchase a house while currently in a Chapter 13.
About 6 months ago, I set out to try and repair my credit. Because I wasn't allowed to get a credit card, I went with a credit repair company called Lexington Law. They basically just challenge every single negative thing on your report. They do this over and over until the bureaus remove the items. Don't ask me how this stuff is verified through the bureaus, all I know is I paid them about $50 per month to get working on it. In four short months, Lexington got a handful of negative items removed and my TransUnion score went from a 608 to a 636.
I went through all this because my goal was to get pre-approved for a home loan.
Just so everyone knows (because I know there are some misconceptions out there), it is possible to get approval for a home loan while currently in a Ch 13. Typically, the only type of loan that one can get is an FHA loan (which is what I got). You just need to find a bank that handles FHA loans. Here are the requirements.
(1) At least 1 year of your plan complete
(2) Middle FICO score of 620 or better (of the TransUnion, Equifax, and Experian scores, the bank will use the middle score)
(3) Documented proof of being on time with trustee payments
That's it.
Once you get pre-approved, you'll have to supply a written letter of approval to incur new debt from the trustee to the bank before you can make an offer on a house.
Obviously, the biggest hurdles are getting the negative items removed from your report, and getting approval from the trustee to incur new debt. Some trustees are very strict in that regard, and some aren't.
Thus, yesterday I was pre-approved for $210,000 at 4.25% with a minimum of 3.5% down. Now, I'm just waiting on the written letter from my trustee.
I hope this helps people who are looking to purchase a house while currently in a Chapter 13.