My biggest concern is that youâ€™re only out of BK 1 year. FHA is pretty strict on the 2 year policy and will only make an exception with extreme circumstances, i.e. Death, Severe illness or dismemberment that caused you not to work for an extended period of time, etc. Divorce or layoffs donâ€™t cut it anymore as a good reason.
Look likes Doug knows what he is talking about, I would give him a call
I am a mortgage broker. If I can be of service, please let me know!
877-238-6324 Ext 704
Your scenario raises several questions before we even get to the cost. FHA currently requires that your bankruptcy, if it is a chapter 7, be discharged for at least 2 years before they will finance you. This would be my first concern. I am assuming your previous loan was NOT an FHA?
As to cost, you need to keep in mind that you are not just looking at the cost of the loan and closing, but also what are referred to as your prepays. These are amounts collected up front to set up an escrow/impound account for your insurance and property taxes. FHA also has an unusual structure for mortgage insurance wherein a portion, usually 1.75% or the total loan amount is charged and although this amount is added to your loan it is reflected in the closing cost figure. The other factor is what you will do with the cash. Are you paying off high interest credit? This would go into the analysis for me to determine if this is a good investment or not.
My recommendation is to ask the question about the BK time frame. If you did a 13 and paid it off a year ago you would be ok on that front. Get a written estimate of the closing cost and, if you like, you can have me give you an opinion on it. Send me an email and I'll send you my fax number or you can email it to me.