Dreaming of buying a home one day

[georgiagin]

We rent a decent home now and of course have aspirations of one day buying a house once the BK is over. That's about a year from now. What can we expect when the bankruptcy is over as far as interest rates (approx) or if there will even be anyone who'll finance us?

[SinkingFast]

A lot depends on your individual situation.

Are you carring any positive reporting tradelines outside of the BK?? Did you have a car loan that wasn't included in your Ch 13 payment plan?? Student loans?? That type of thing.

Another thing that will impact your ability to borrow and at what rate is your Credit Report. Have you taken a look at those?? You can see you CR's for free from all 3 Credit Reporting Agencies at http://www.annualcreditreport.com.

You won't get your actual FICO there, but you can see if there's any problems that you need to be working on clearing up.

Also, there's several Credit Monitoring Services out there. Once you get closer to the end of your payment plan, you may sign up for one of those to track your FICO and pulls on your credit.

Clean up your Credit Reports and get some positive reporting tradelines going ASAP. That will help the most to reestablish yourself. You should be able to buy a home within a couple of years of discharge, if not before.

[nk29]

You can get a FHA mortgage one year post Ch 13 (filing, not discharge), 2 years post Ch 7 discharge. The interest rates are very competitive, and they add about .250% to the interest rate if you had a bankruptcy. Right now I think the rate would be around 6.5%.

Other lenders will also give you a mortgage, I am just not sure what their rates would be like. FHA doesn't go by credit score per se, but they do add a little on to the interest rate depending on if your credit score is below 660, etc. It's still a great deal for someone wanting to buy a home without perfect credit! With a Ch 13 you need approval from your trustee, as well.

[jane taylor]

Thank you for the information! I didn't realize we could buy a home in as little time as one year after filing Chapter 13. My husband and I are considering getting something with less upkeep than our current home. We're not sure and are taking things one day at a time, but our current mortgage is way too much after refinancing a couple of times.

We'll see.

jane

[no_it_all]

Ditto on the FHA mortgage..especially their 203(k) program for fixing up a home (and getting instant equity!)..

[nervousSC]

So here's a dumb question....If you sell your home while you're in a 13, say a year after filing...do you have to give the trustee the $$ that you would normally pocket from the sale?

[LostOne0069]

I thought it was one year post chapter 7 discharge that you could buy a house with close to normal rates.... is this incorrect?

[no_it_all]

I thought it was one year post chapter 7 discharge that you could buy a house with close to normal rates.... is this incorrect?

Yes

[MTG_BANKER_OH]

I thought it was one year post chapter 7 discharge that you could buy a house with close to normal rates.... is this incorrect?

It is 2 years out for a chapter 7 to get an FHA loan, 12 months for a chapter 13, you can obatin a loan just after BK though, but the rates are goint to be high around 8%.

[LostOne0069]

It is 2 years out for a chapter 7 to get an FHA loan, 12 months for a chapter 13, you can obatin a loan just after BK though, but the rates are goint to be high around 8%.

I'm afraid I haven't done a mortgage in several years.... what's the going rate right now for someone with decent credit? The last time I bought a house 7% was a decent rate.

A few other questions for you:

What's the difference between an FHA loan and a "normal" loan?

That 8% loan right out of BK, is that a "normal" loan? Since obviously your credit rating must not be the main qualifying factor, what do they look at for qualifying?

[quickteg]

Has anyone on this board actually applied for an FHA loan AND got trustee permission? What was the overall experience?