Tired of Renting in Texas

[benjismommy]

I have been renting a house for 6 years paying $1600. I had been working on my credit, when I went through a nasty divorce and had to file chapter 13 in 2009.

I have never missed a rent payment, bankruptcy payment and all of my utilities are current no lates in the last 2 years. I have almost $4000 saved. My credit scores on my monthly monitoring program are 612/591/575.

The trustee has approved me to incur debt for a mortgage (projected mortgage will be $1100 a month). I have been on my job for 16 years, I make about 62k a year.

Does anyone know of a program that will help will finance me?

[newbie2]

Your credit scores aren't high enough yet for a mortgage. New minimum requirements for FHA are 640 for most lenders. (FHA may state differently, but they are only the "end" insurere, not the original lender.) You can try your current bank or credit union, but it is doubtful if you qualify yet.

[getback]

So you can get a mortgage while in BK? WOW. I did not know that this was possible...

[justbroke]

Refinancing and new mortgages are possible in a Chapter 13! You just need to make all your payments to the Trustee on-time for at least a year... AND you must meet general credit requirements for the lenders. The former being easy, the latter being difficult.

[getback]

one bank near me says that if you can put 20% down and have made time payments on time.....well I will just have to see. So does this mean I have to go through the motion with the judge? Or will this be a trustee motion?

[justbroke]

You need Trustee permission, but also need the Court to issue an order allowing it. The usual etiquette is to ask the Trustee if it's okay to seek an order allowing you to incur new debt!

[benjismommy]

I got approved by the trustee!! In progress!! Credit score is now 646/618/619!!!

[getback]

what did the bank put down for the conditions? how does the rate look if you do not mind me asking?

[benjismommy]

No delinquencies after filing bankruptcy. Minimum 620 mid score. 3.5% down, my seller is paying all closing costs, interest rate will be 4.25+ not over 5 percent. I am teacher so I am taking a homebuyer class and they give us a grant to pay 3% down payment or closing costs. So I am going to be out of very little money.

I filed in October 2009, and I am striving to close by the end of 2011. I am waiting until my score gets above 620 to get the best interest rate. I helped boosting my score by getting a secured loan from my credit union. Paid it off in less than 6 months, also got a Orchard credit card been paying the total balance in full every month.

[getback]

so I take it you had to go through the income forms with your trustee. Was your trustee difficult?

[benjismommy]

no trustee was simple I just had to fill out a 2 page form that showed what my expenses were and attach a paycheck stub. My attorney was gonna charge 300 bucks to do it. I did it myself. Received an answer in about a week. I also included explanation that rent was $1600 mortgage would be $1100.

[Drazil65]

Congrats on all your hard work! You have done an amazing job pulling it all back together and I applaud you on that! Question, just curious on this one and what your thought process was during this decision, Have you thought of just renting a much cheaper place, say for 1 more year, save even more money down and then look to buy? I guess my thought is (not that is matters in this but I try to learn as I go with how others handle things), a house is much more in the way of responsibility and if one major thing goes wrong or a major appliance breaks (or the heat source, a/c, electric, plumbing you get the picture) and you do not have the money to fix, the whole CC things starts all over again because you will have no other option but to charge it. If you are able to have a little emergency fund built up in addition to the down payment it seems like it would be an overall better way to go? As a home owner (many times over through out the years) I know for a fact that things happen constantly/unexpectedly with houses and I know how much stress is associated with owning a house because of it, sorry just talking out loud!!!

[getback]

no trustee was simple I just had to fill out a 2 page form that showed what my expenses were and attach a paycheck stub. My attorney was gonna charge 300 bucks to do it. I did it myself. Received an answer in about a week. I also included explanation that rent was $1600 mortgage would be $1100.

did you contact the trustee directly? or via the lawyer?

[benjismommy]

I am buying the house I am leasing. I didn't want the added expense of paying for movers, transferring utilities, paying deposits etc. The house has a home warranty which covers all appliances (heat, a/c, electric) and other things that may break down in the home. The cost is 40 bucks a month and a 60 dollar service call.

Drazil65 - I know I will be able to afford the home I'm living in because I have managed to make every rent payment now that I will be a homeowner, I will be saving $500 a month. I won't do like so many people that end up in foreclosure because they suffer from payment shock ie. go from paying rent of $700 to a mortgage of $1000.

getback I did every thing on my own. Trustee has everything needed on the website.

[bling32]

Congrats! Keep us updated. I am in the same situation and want to buy a home at the year mark of my chapter 13. I am renting $1865.00/month and I want to purchase the home that I am renting. If I purchase I can save about 500.00-600.00/month since interest rates are low. And, I will have a tax deduction. Keep us posted. Thanks!