Posted on: 15th Jun, 2007 02:50 pm
My current apartment lease is going to end in three months and I am expecting a steep rise in my rent when the lease ends. By that time I would prefer to by a home than continue. I had my discharge from bankruptcy now close to 2 years now, two months to be exact but one mortgage guy told me that as I had not owned a house previously I would not be able to get approval for a normal mortgage even when it would be more than 2 yrs. past bk. This guy was telling that i will only get sub prime and insted of waiting for lease to be over I should go for the buy as soon as possible. my middle score is 670, I need to check again. what you all say on if it would be better to wait for the next two months by which 2 yrs. would be past through bk, would I get better loan then or take the loan right now?
John, this mortgage guy seems to be just trying to push you into a loan sooner for his own interest and not looking at what would be best for your situation. You not having owned a home before should not make any difference in what you can qualify for. You should be able to get normal rates 2 yrs. post bankruptcy and as it just 2 more months, it would be better if you wait and then go for the purchase.
Miller
Miller
I too think not having owned a home previously is of any importance for you and will not affect your purchase.
You have good score and if the dti ratio is also satisfactory then you shouldn't face any problems with getting approved.
Wait for another 2 months and then look to buy as you will have one more month before the lease will be over. And forget about this mortgage guy, he doesn't seem to be the right person to go with.
You have good score and if the dti ratio is also satisfactory then you shouldn't face any problems with getting approved.
Wait for another 2 months and then look to buy as you will have one more month before the lease will be over. And forget about this mortgage guy, he doesn't seem to be the right person to go with.
"This guy was telling that i will only get sub prime and insted of waiting for lease to be over I should go for the buy as soon as possible."
- 2 years post bankruptcy you can qualify for conforming loans (normal mortgage) and do not have to go with sub primes.
- 2 years post bankruptcy you can qualify for conforming loans (normal mortgage) and do not have to go with sub primes.
You need to wait until you have 2 years post BK. At that point you will qualify for a conforming loan pregram. There are exceptions that can be made if the reason for the BK was circumastance beyond your control like major medical or job loss. It would have to be clearly documented. Otherwise you need to wait and at the 2 yr post BK mark you will be ready to go. You can start the process a little sooner so you have time to find a new home and get pre-approved but the electroninc approval will not be finalized until the 2 year post BK mark.
As others have alluded to, most conventional lenders will require a 2 year seasoning/aging of your bankruptcy.
The individual you are consulting is probably telling you to go subprime and refi once you reach the 2 year anniversary---if so, he is more concerned about the transaction (his payback) and less interested in what is in your best interest.
There is another approach worthy of consideration that has gone unmentioned---using a loan program that is manually underwritten.
Although the majority of all loan decisions are made by a computer, there are still a few lenders/loan programs that do it the "old fashioned way" (a human makes a decision).
With compensating factors (like cash reserves, liquidity, low DTI, etc.), I have been successful in getting sub-2 year BK borrowers approved with a FHA loan.
Regards,
Scott Miller
The individual you are consulting is probably telling you to go subprime and refi once you reach the 2 year anniversary---if so, he is more concerned about the transaction (his payback) and less interested in what is in your best interest.
There is another approach worthy of consideration that has gone unmentioned---using a loan program that is manually underwritten.
Although the majority of all loan decisions are made by a computer, there are still a few lenders/loan programs that do it the "old fashioned way" (a human makes a decision).
With compensating factors (like cash reserves, liquidity, low DTI, etc.), I have been successful in getting sub-2 year BK borrowers approved with a FHA loan.
Regards,
Scott Miller
Hi John,
I do feel that you should wait for 2 more months. Then you can start looking for a loan in order to buy a home. Currently your middle score seems to be ok. But it is better that you wait for some more time and repair your credit by taking out a credit card of a low limit or a small loan. And, then you can start shopping for a loan. It will be easier for you to get pre-approved at that point of time rather than if you apply for the loan today.
Thanks
I do feel that you should wait for 2 more months. Then you can start looking for a loan in order to buy a home. Currently your middle score seems to be ok. But it is better that you wait for some more time and repair your credit by taking out a credit card of a low limit or a small loan. And, then you can start shopping for a loan. It will be easier for you to get pre-approved at that point of time rather than if you apply for the loan today.
Thanks