Done in Sept 2015 (100% payback plan) Buying a home question?

[Flying2BK]

I will complete my BK-13 in Sept 2015. It was a 100% payback plan with no issues.


I want to buy a home, and I thought it would be years before I could do so, but my current employment is vastly different now then it was in 2010. I make 202K a year and have zero debt. I have one credit card that I hardly use but do try to make a charge or two and pay it off asap.

My question is should I start shopping around for a home loan or will this take a few more years while I "rebuild credit" personally I like the "cash only life" and has done me very well the last few years. I am renting my current home which is $2200 a month--I easily make all my cost of living payments and the BK payments are $900 a month, I would think if a person's income is $202,000.00 a year with the BK payments going away minus my rent I have almost $3000 a month available for a home mortgage.

I keep hearing all these great home loan rates....I have not been interested in obtaining debt ever again--that is what got me into the mess 5 years ago. But want to hear the real scoop on home loans for CH-13BK survivors!

Thanks in advance!

[Flying2BK]

some say wait until the end (september) others say you need to be out of CH13 for 1-2 years. Anyone?

[LadyInTheRed]

Please don't bump threads. You need to be a little more patient, especially for a question that very few active members will have personal experience with.

Check the "mortgage after bankruptcy forum", especially the current thread by Warmblood.

[justbroke]

From what I have learned through reading multiple threads and web sites on this topic, it would appear that getting approval while in the Chapter 13 may be easier. You must remember that FHA allows someone that is IN an active Chapter 13 to actually obtain a loan. You may still need to shop around, but I think it's easier. Waiting until after you are discharged will bring the creditors that say your discharge must be seasoned and you must wait 1-2 years before applying.

Even worse, different lenders have different overlays on top of the FHA base requirements. You may need to really shop the loan.

But, it has been done. I wish you luck and hope you share any experiences.

[mtdailey]

I am 57 months into a 60 month plan. I was renting a place, but the situation changed and rather than move twice in a year or 18 months we thought it would be worth look into the possibility. Go to a mortgage broker or apply directly with Carrington Mortgage(they are one of a few lenders that will still serve this market).

The process was really no different than applying for a mortgage prior to my bk. I believe that it will be easier for you to obtain a loan now than it would be after your discharge. For what it's worth we bought a place for 3.5% down at 3.75% interest. We closed on March 16. I couldn't be more pleased with the way things worked out and am glad we decided to look into buying.

Good luck!

[159515951]

It's definitely possible -- we're trying to do the same thing right now. FWIW, and this is my own soapbox issue, but it makes ZERO sense to me that someone can discharge all debts through Chapter 7 and purchase a home a few years later, while those of us in Chapter 13 are punished for an extra 3-5 years for paying at least part of our debts. It's just a complete load of crap.

Discharge all debts = 2-3 years of grief, and $0 out of pocket.

Pay part of debts over the course of 5 years = 7 years of grief, tens of thousands of $ out of pocket, and asking a Trustee for permission to do practically anything.

[dmc-2008]

159 I tend to agree but either chapter is pretty tough to deal with! ;-(

[LadyInTheRed]

asking a Trustee for permission to do practically anything.

I want to point out for anybody who is just starting the process and reads the above that it is an exageration. Yes, if you want to incur debt or modify existing debt, you need the trustee's approval. Other than that, there is practically nothing that you need the trustee`s permission to do. I am almost done with my Chap 13 and have never had any reason to contact the trustee for any reason other than sending in my check every month.

[BNKRPTinNC]

I want to point out for anybody who is just starting the process and reads the above that it is an exageration. Yes, if you want to incur debt or modify existing debt, you need the trustee's approval. Other than that, there is practically nothing that you need the trustee`s permission to do. I am almost done with my Chap 13 and have never had any reason to contact the trustee for any reason other than sending in my check every month.

Will second that! The only times I had contact with my trustee was when I initiated it. Twice if I recall, once when I retired and payroll deduction was no longer feasible and at the end to verify my last payment.

[dmc-2008]

I 3rd that! Just send money and tax returns, so far! Knock wood.

[ABC]

You should wait at least until the discharge is over so you don't need Trustee approval. You can do it 1 day after discharge. Make sure your rent history is good for last 12 months and pay by check or other than you can track. Have you applied for any credit ? You should apply for a card when you start receiving offers.

[159515951]

I want to point out for anybody who is just starting the process and reads the above that it is an exageration. Yes, if you want to incur debt or modify existing debt, you need the trustee's approval. Other than that, there is practically nothing that you need the trustee`s permission to do. I am almost done with my Chap 13 and have never had any reason to contact the trustee for any reason other than sending in my check every month.

Fair enough. I'll amend my original statement to the following:

...asking the Trustee for permission any time you have a situation that requires additional debt (e.g. buy a car, refinance anything, need a credit card for business, etc.), or if you want to dispose of any assets (e.g. sell a car).