Home Buying in 95670>Question Details

Pat, Home Buyer in 95670

I filed chapter 13 bankruptcy in aug 2009. I have done nothing to re-establish credit so my credit score is 596. great salary 25 yrs. can i qualify?

Asked by Pat, 95670 Sat Oct 8, 2011

for a loan to purchase a home? It is a 5 year plan for the chapter 13. Do I have to wait until two years after the last payment is made to the trustee to qualify for a loan?

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I had a client who purchased his home with 2 years remaining on his Chapter 13. We did have to get his bankruptcy attorney to file with the court for approval. That added about almost 3 weeks to the purchase process. Unfortunately, his attorney said he could not make the request without a fully executed purchase agreement. But, the attorney also reviewed the file first and felt confident that the court would approve the sale. However, and most importantly, the court noted that based on his improved circumstances and his current salary, his Chapter 13 payments would be raised. That was not mentioned previously by the attorney.

So, my client did get his house. He was very happy about everything except the increased payments on the bankruptcy. His lender was terrific - Jim Langdon at Homebuyer's Assistance, phone # 916-717-5626.
0 votes Thank Flag Link Sun Oct 9, 2011
With a Ch 13 BK...

• You can be still *in* a Ch 13 BK with FHA, USDA or VA financing, it is just required that:
- one year of the pay-out period under the bankruptcy has elapsed
- your payment performance has been satisfactory and all required payments have been made on time, and
- you have received written permission from bankruptcy court to enter into the mortgage transaction.
• If it was a dismissed BK then 2 years from the dismissal date for FHA or VA financing (3 for USDA)
• Fannie Mae & Freddie Mac require 2 years from discharge date & 4 years from dismissal date (2 years from dismissal with extenuating circumstances)

However you need at least 12 months of re-established credit and 3 traditional trade lines, some lenders want 3 trade lines of 12 months each. Trade lines that survived a BK, such as a credit card you kept open, a car loan you maintained payments on/didn't include, student loans that you are making payments on that couldn't be included, etc. can count towards the re-established credit.

Having a verifiable on time housing payment history goes a long way to making an underwriter feel comfortable, as well as taking a pre-purchase housing counseling class with a budgeting/financial module. Practically anything you can do to prove that you have made & kept a vow to make all payments on time will be helpful.
0 votes Thank Flag Link Sun Oct 9, 2011
Pat in most cases you have to be discharged from bankruptcy in order to get a mortgage, with that credit score you may need at least 20% down to get a mortgage.


Please see my blog with tips on getting a mortgage
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Sat Oct 8, 2011
Normally I believe you have to have it discharged in order to qualify for a loan but I'll rely on the mortgage professionals to guide you in this confusing market.

Chris Stahl at Summit Funding is working this weekend and he's my go-to guy. he can be reached at (916) 768-8000. If you can't qualify now, it's not too early to work towards rebuilding your credit so either way, he should be able to give you good advice.
Web Reference: http://www.suearcher.com
0 votes Thank Flag Link Sat Oct 8, 2011
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