Renting or Buying a Home Before BK is Discharged

[wjnicki]

hi,

We are in a situation right now. I filed ch7 in August 2007 and it has not been discharged yet, due to a creditor showing up at my 341 meeting.

But right now we are paying almost 1700 per month in rent for a 3 bedroom 2 bath apartment in Odenton, Maryland. We moved to the apartment in 2002 primarily b/c of the elementary school.
Now we have the opportunity to move to a less expensive area. But here are the problems - 1st my BK has not discharged, 2nd I pulled my credit scores: Experian-580;Transunion-563;Equifax-546
3rd I make about 55K and my husband makes 20K. But his credit scores are Experian 798;Transunion; 795 Equifax 799.

Can we get approved for a mortgage even though my BK is not discharged? We are looking at a condo for about 180K. Will a bank use my income, but my husbands credit score? We will be first-time homebuyers and also have the VA backing us up on a loan. We really can't afford to have are rent increased anymore.

Any advice?

[krielly]

I suppose it is possible. I think you may want to sit down with a lender or two and see if you can get pre-approved. Perhaps with the condition that your 7 get discharged first.

First and foremost, however is this. how much will you really save per month? Does your current rent include any utilites? If not, then plan on adding a big chunk to your budget to support that. Also, don't forget a condo will come with Association dues/fees. Do you know how much those will run? Also, don't forget about budgeting for repairs. You'll need to set money aside each month for household maintenance. Things do break, etc.......and you can't call the landlord anymore when you are a homeowner. You're on your own.

Guess I question whether or not you've really done your homework on whether or not this will really wind up saving you any money in the long run? I can't imagine you will get a great interest rate on your mortgage with your current situation, and when you add taxes, insurance, mortgage, association dues, etc..... I'm not certain you will really be in a better place.

Sorry to be a bit negative here .....just trying to be realistic. Being a homeowner involves so much more than just a mortgage payment. Please look into all of this carefully.

Is there any reason you are in a rush to move? Why not get through this whole 7 thing for now and when that settles, maybe pursue buying a home then. Be very careful in this current market. not sure where things are at in your area now, but we live in Vermont. Unlike so much of the country, the market hasn't really taken a huge dive here yet. The down side to that is that property values will continue to fall further, this being a VERY bad time I would say to buy a house in our area anyhow.

Again, if you MUST move, go get preapproved first! You'll save yourself a lot of heartache, or getting attached to something you may not be able to afford.

Good luck to you!!!!!!!!!

[wjnicki]

First and foremost, however is this. how much will you really save per month? Does your current rent include any utilites?

we would probably save about $ 300-400 a month( depending on the APR that we get) Nope we pay all utilites.

Also, don't forget a condo will come with Association dues/fees. Do you know how much those will run?

100.00 per month

Sorry to be a bit negative here .....just trying to be realistic. Being a homeowner involves so much more than just a mortgage payment. Please look into all of this carefully.

that's okay about being negative, but we are completely aware of how much is involved in being a homeowner. We don't want to get in over our head with something that we can't afford.

Is there any reason you are in a rush to move?

yes, first the rent keeps going up it will be around 1780 when our lease expires.(our lease expires in August of this year, but the way my BK is going I don't think that it will be discharged by then.)

If we need to we will wait another year until 2009 to try to get a mortgage. We want to move before our daughter starts middle school in the fall of 2009. B/c the middle school that she will go to if we stay here is not a good one.


Thanks,

[Knew_it_all]

Why don't you talk to someone that knows? Like a mortgage broker ???? I would call a few and just give them the same exact info you posted here....