How Soon Can We Buy A Home After Chapter 7
hi, we just disharged our chapter 7. we both have good civil service jobs and with are bk done now have no debt. no credit cards, car loans, nothing. question? anyone know if we have to establish credit with something like a car loan before considiering a mortgage or can we stay debt free and just buy a house and if so how long after bk. thanks for advice 
Good Day to you:
You mention that you have no debt, do you have any credit cards active? If so use them and pay them off monthly to establish some history. A car loan is good but why waste your money on something that is going to depreciate. I am sure that there are some lenders out there that will get you into a home loan, it may not be as attractive on the rate and points, but if you can find it, it will be a quick start back into the credit world
You just have to remember how you got into the BK, and try and saty out.
If your credit report is void of any credit, you will need to establish credit. Cards first, then go for the home.
Just my opinion,
Good luck and make $$$
Tom
You will more than likely not be able to get a home loan and if you do let me know who you went through. I am reestablishing with a car loan and a secured $500 loan at my bank. The car I bought at 4k below book and it shouldn't depreciate much. Cruise the big dealerships for their preowned cars. Find one that you can afford with available equity. I bought a 2002 Ford Taruas with 30k miles it books for 13k I paid 9.5k out the door. My interest rate could be considered highway robbery but it is expected considering the bankruptcy was my fault anyway. Keep going forward be careful not to sink the same boat again and in a year or two try for the home loan.
Good luck,
Jim
Depending on score and how much down payment you can come up with, there are fresh out of bankruptcy mortgages available to you. i know you probably have little savings since you went into bankruptcy, but since you have good jobs, you may be able to draw from your pension for a good size downpayment, and get a house that way. In a year with perfect payment you can qualify for a higher LTV, lower rate refinance. Just make sure you check out all options before you decide you can or can not do it.
Welcome to TCI ibwats,
Even after you discharge chapter 7 BK, not telling bank that you had BK's when they ask on application may qualify for bank fraud so technically speaking, your credit records and ability to borrow money is marked for life even of the actual text is not on your report. That sad, I do not mean to discourage you of trying to get a mortgage or a loan. In fact, I believe that you should try to reestablish the credit as soon as possible but while doing so, you might find that discharge is not really a true discharge. That's all.
However, if you want to be practical, unconventional real estate allows you to use motivated seller as bank. Some people call that sellers carry and some subject to or lease option to buy, etc. With all that techniques in mind, buyer's credit is often not an issue for as long as there is a good will on the seller's side to make a deal go true.
Look for the motivated sellers and you'll get your house before you can imagine to get a solid loan. In looking for those pearls, the world is your oyster! But I sincerely hope this gets you started!
If the bk was done properly you would be able to get a mortgage THE NEXT DAY. The LTV or the interest rate would not be the greatest. As long as everything that was included shows a zero balance this is possible.
This is even to your advantage that you have no car loans or credit cards. This will make your debt ratio low.
You would be able to use gift funds for a down payment and a seller concession of up to 6% depending on what state you are in. If in one of the allowable states you may even qualify for an unlimited seller credit.
So there is hope!!!!!!!!!!
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Lori
What state are you in?
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real estate investor since 1988. I like to find creative solutions for my real estate headaches before they become problems. Most importantly, MOVEMENT DOES NOT EQUAL PRODUCTIVITY[ Edited by tinman1755 on Date 02/16/2004 ]
i live in california so an affordable house is almost impossible......250k gets u the smallest three bedroom there is..............we have seen mortgage companies that say they can get u financed but they add a second on the loan. dont know what thats all about.
Hello.
The day your BK is discharged is most likely the first day you'll get any kind of mortgage financing that I would trust. I've seen offers come through the fax machine that say BK friendly, but I don't know if I'd even call them.
I was able to gain financing by actually paying off my BK and providing a copy of the check. So, I wasn't even discharged at that time.
It can be done. There are literally 1000's of loan programs out there.
Ask you BK lawyer for help finding a loan, he may be able to recommend a lender since its his line of work.
Take some time and start checking around for resources and you'll find a loan program that will accept you.
I also wouldn't worry too much about the higher rate you're going to get. Regardless of the interest rate, its better to be in a property than not and the higher interest payments will still help you at tax time. You can always refinance at a later time to a lower rate.
Good Luck.
I don't know the laws in CALI but the 2nd is probably seller held to pay for closing costs. You would still need a huge downpayment
Good Luck
Lori
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Quote:
On 2004-02-16 13:31, killenjw wrote:
..... I am reestablishing with a car loan .... The car I bought at 4k below book and it shouldn't depreciate much. Cruise the big dealerships for their preowned cars. Find one that you can afford with available equity. I bought a 2002 Ford Taruas with 30k miles it books for 13k I paid 9.5k out the door. ...........Good luck,
Jim
Jim
What kind of Tarus did you buy? LX,SE,SES,OR SEL?
Careful about the advice of shopping at a big dealership for a car with equity. It does NOT happen. No how No way!!
Take it from a guy who buy's 100+ cars a month from them and sells to them.
The reason I say this is they will sell the car to another dealer before they will sell it to the public. To much liability for no gain.
You are right on by looking at pre-owned though, A two year old car is your best buy that is still under factory warrenty. If you are a shrude negociator and you buy a car with a high residual value, along with a 3 or 4 year note with decent interest rate, your new purchase should depreciate about the amount of your payment each month untill you are about 3/4 into your note. Then you start to be in an equity situation. If you do this you will NEVER be as they call "upside down"[ Edited by WheelerDealer on Date 02/17/2004 ]
ibwats: If you were able to maintain your credit score through the bk, let's say 600 middle, you could still qualify for 100% purchase loan financing through a lender called First Franklin. They have no seasoning on bks and they have fair rates. I could have 2 people with 600 scores, 1 with recent bk and the other without and the bk person would only have to pay .25% higher in rate. I have done this. By the way, I have seen people just out of bk with a 680 score. If you quickly react to the situation before you are dragged through the mud with late pays it's possible. You need to find a mortgage broker and ask them if they have access to First Franklins programs. There are other lenders that can work with the bk, but none that I have seen that will go as high ltv with fair rates.
In view of your job descriptions, I would make enquery with your credit union.
Here in Calif. One of my clients just bought a house 30 days after discharge from Chap 7. Their car was paid for and their credit cards a thing of the past. The reason for the BK was they tried to keep a sick child alive and did so for three years but it destroyed them.
We assisted in the purchase of a small house in Sunland a medium working class area. Between an assistance from the Broker, and other friends their out of pocket expenses (total) for purchase of a $275,000 house was $1825. Total. We all helped. The eldest child is gone but they are settled in with the youngest surviving child. And life goes on.
Lucius.
There is a loan program with no credit check but you would need 10% down. If
that is your scenario they would guarentee the loan. More info if you need
it. Mike