Due to a bankruptcy I cannot buy until January 2009 (first time buyer, single mother of 3). Will there be?

Asked by Diane, 48362 Fri Aug 8, 2008

anything out there to help me with a down payment? What do you estimate the rates will be. I'm in MI, 48362 .

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Maria Morton, Agent, Kansas City, MO
Fri Aug 8, 2008
Diane,
it's good that you are thinking ahead. As has been mentioned, passing the required time limit is just the first step. Since you know what you want, putting a plan of action in place now will help you be ready when the time comes.
I suggest you meet with a local lender to ask their advice on how best to proceed.
They will probably tell you to pay your bills on time, don't accrue any more debt, and start saving--even if you can only save $20/month. Savings and investments are what is meant when the financial gurus tell us to pay ourselves first. (Not saving for a shopping spree; saving money that will accumulate over the years)
Besides a mortgage lender, meet with a realtor. Make a commitment to that realtor and ask the realtor to commit to you. S/he can help keep you apprised of the housing situation in your area as well as informing you of changes in real estate law and mortgage lending practices. Being well-informed will put you in a better position when you are actually ready to purchase. Your realtor can also set you up with daily, weekly, or biweekly email updates describing the houses for sale, sold, pended, etc in your area. S/he can also get you a list of Open Houses in your area on Sundays. Then you can spend an hour or two some Sundays visiting homes in person to familiarize yourself with the neighborhoods and condiition of homes in your desired area.
When it is time to buy, you will have a good idea of what you'd like in a home.
Your realtor can help you determine what you can get for the money.
They can also help you see what could be done to improve the house and make it more of what you want in the way of finishes.
When you buy, ask your realtor to help you find a house needing the least amount of corrections.
Location is #1.
Find the best house you can afford in the area you'd like to live in.
Find one with a floor plan that suits your lifestyle.
Then look at foundation and mechanicals. These are the critical elements.
Paint color, cabinets, countertops, appliances, built-ins, are all fluff and can be changed.
Pay attention to things like insulation and windows.
Ask your realtor to help you figure out the cost of thermal windows. If the home you purchase does not have these, adding them will increase the home's value, lower your utility bills, and provide an additional tax deduction for you. There may be funds available to you for the actual purchase and installation of the thermal windows. Same with insulation and doors.
If the house needs painting, try adding this powder to whatever paint you select:
Hy-Tech ThermaCells - this is a ceramic additive that gives paint insulative qualities; it is used by NASA, USFS, FEMA, FAA, Army Corps of Engineers, and more. The additive costs money up front but saves you money by lowering your utility bills. Hy-Tech is located at 159 Parkhill Blvd. W. Melbourne, FL 32904
phone # 321-984-9777
One of my clients introduced me to this product after showing me a 25% reduction in heating/cooling bills after applying the paint.
Your realtor will have tips like these for you after the purchase of your home too. Most of us keep lists of vendors that work on home's; we provide these to our clients so you don't have to spend a lot of time looking for someone who will do good work at a fair price.
By working with a lender and a realtor now, you can develop and stick to a plan that will get you where you want to be in the next year.
Best wishes for your success,
MariaMorton@ReeceAndNichols.com
Kansas City
816-560-3758
0 votes
Michelle Gor…, Agent, Ada, MI
Fri Aug 8, 2008
Okay, to answer your question if you do qualify for a pre-approval of a loan, RD has an 100 percent loan: here is the website:
http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
FHA DPA (ameridream) may still be around, right now they say no more after October 1st, but trying to get a bill passed to let it stay on, only time will tell.
The tax credit is only after you buy a home, but is great for any updates your new home will need.
0 votes
Tony Grech, Mortgage Broker Or Lender, Southfield, MI
Fri Aug 8, 2008
Diane,Scott makes a very good point. Just because enough time will have passed that you could qualify for a mortgage doesn't mean you automatically will qualify. As lenders we're going to look at the explanation for your bankruptcy as well as to get a feel for whether the circumstances surrounding it have changed. Have you worked to re-establish your credit and paid those bills on time since? Normally we're going to want to see at least a couple credit accounts (car lease, credit cards, etc) with at least a 12 month history with no late payments. These days lenders are also looking carefully at savings patterns. Even though you may not be able to save up enough for a sizeable down payment, you should make every attempt to save up at least a few hundred bucks per month between now and January.

Those are just a couple factors to be aware of. Call me or email me and I can walk you through the process and help you get in the best possible shape to get a mortgage come January.

Tony
0 votes
Scott Sowles, , Clarkston, MI
Fri Aug 8, 2008
Diane,

You've gotten some good advice so far - kudos to my associates! I'd also suggest that you start talking with a mortgage rep now. The bankruptcy is only part of the problem. You'll need to have established good credit to off set the bankruptcy. A good mortgage rep can guide you so that you're not only approved in January, but you're approved with a good rate and terms.

Many buyers wait too long before choosing a mortgage rep or a Realtor. You should be working with both right now. And don't think you're bothering either of them. If they aren't patient enough to work with you now knowing that you'll be purchasing in January then you need to replace them with better people.

Contact me directly if you'd like additional help.
0 votes
Sonya Loose, Agent, Beaverton, MI
Fri Aug 8, 2008
Diane - don't forget the Home Buyer Tax Credit that was just signed into law of up to $7,500. It will be available until June of 2009. This is an interest free loan that is paid back over 15 years.
Web Reference:  http://www.sonyaloose.com
0 votes
Derek Bauer, Agent, South Lyon, MI
Fri Aug 8, 2008
Diane,

All other factors being in-line (i.e. your credit scores, debt-to-income ratios, etc.), and as long as the DPA (down payment assistance) programs are still around ... which I feel that they will be ... you should be fine.

As to what rates are going to be ... if I knew that, I would be an extremely wealthy man! :) By most indications, it would not be suprising if rates are higher in Jan. '09 then they are now.

Best regards
Derek Bauer, Real Estate One
Web Reference:  http://www.DoorToDreams.com
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