Where and How can my husband and i buy a house 6 months after bankruptancy?
by Author on Saturday, August 28th, 2010 | 7 Comments
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Pretty much anywhere. You just need a lender. They will probably charge you a high interest rate though.
A home loan is a secured debt and cannot be discharged in a Bankruptcy.
You can’t file for Chapter 7 again for I think 10 years, so the lender is very safe and can easily forclose if you default on the loan. Plus they will make a lot of interest from you. So they really want to lend you money.
But can you accept their terms?
P.S. I am in Ga and going through the same thing now.
Banks have different rules about BK, but in general most lenders want the filing to be at least 2 years ago, and it must be discharged. Some want the discharge to be 2 years ago. Some will then look at the current credit the same as any one else’s credit, but other will really dig deep. The bank where I work also wants the reason to have been beyond your control (divorce and loss of employment/business are not acceptable reasons…somebody had to get sick or your partner ran off with the money, or something like that), we cannot have lost any money because of it, you can’t have even one single slow pay on your credit report, and there must be new credit established since the date of filing.
State Farm Bank is pretty liberal with BK, compared to the other lender’s where I’ve worked. Your scores are pretty low if they’re around 600. 620 and below is considered poor. You may need to wait a while longer. Going forward, be very very careful that every payment is timely.
I agree. Most reputable places are going to want you to wait till 2 years after your discharge before they give you a loan.
In what is happening today market with all the foreclosers most places are not going to be willing to give you 100% financing.
Last year I tried to get a loan and I had $15K to put down and no one would touch me, I didn’t even have a bankruptcy.
Any other place that you try for with a loan you are going to find that the interest is crazy. You are going to be paying a ton of money just on interest alone. If you can even find a place.
A credit score below 620 is "Poor," and 620 to 660 is only "Fair." Today’s mortgage lenders want FICOs of 700 or better.
"No down" mortgages are a thing of the past. You will need at least 10% down, maybe 20% or better with your history of bankruptcy.
Most mortgage lenders will require you to have your bankruptcy discharged for at least 2 years prior to applying for a mortgage. During that time you must have received new credit, and you must not have any late payments or delinquent accounts since the bankruptcy.
Your employment history, income, debt ratios, income tax returns and bank records will be very closely scrutinized.
Today’s mortgage market is very tough and lending standards are becoming much more strict.
If you could find a lender who would give you a mortgage, you probably should not accept such stiff terms and high interest rates when you are not yet back on your feet.
Rent for at least 2 or 3 years, manage your money very carefully and save a minimum of 10% of your income out of each paycheck. Make sure you pay every bill on time — and not just the minimum or you will be over your head in debt again within the year. After you demonstrate that you have gotten yourself back on your feet, then you can think about buying a house and getting a mortgage.
Right now — and just with the limited info you give here! — you are already showing every sign of falling back into unmanageable debt and financial ruin within the year, and any legitimate credit grantor would likely run from you for dear life.
Will not even be considered for at least 2-3 years, and with the market as it is will need at least 20% down and a good payment record since your BK. Remember the BK is a bad mark on your credit for 10 years
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Hope that can help you/.