I'm finalizing my bankrupcy. How how likely am I to buying a home or to rent to own?

Asked by Elizabeth, 92570 Mon Jan 18, 2010

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Grace Hudson, Agent, Canyon Lake, CA
Tue May 15, 2012
Hi Elizabeth,

I know it is a really difficult time for you and you may be feeling that no one will help when you need to find a place to live. As far as buying a home goes there are general guidelines that a Lender has to follow. Regardless of which Chapter you filed a Lender needs to see if you have become Credit worthy. You will have to start with re-building your credit and making every payment on time and well under the available credit line. This may mean that you will need a "Secured Credit Card". Most Lenders will require 3 forms of re-established credit. You'll also need a great "Letter of Explanation". Something showing a Lender that you were put into a financial hardship that wasn't expected and that is highly unlikely to happen again. These are all things to keep in mind while waiting the required 2 year timeline from the Discharge of your BK for an FHA loan.
As far as Rent to Own goes that is where you pay a higher rent and a certain amount of your rent goes towards your Down Payment. So let's say you need the 2 years to qualify for a new loan. You would have an agreement with the Owner that you have 2 years to obtain financing and that X amount of the dollars you pay per month for rent goes towards the Down Payment. I don't know of any "Rent to Own" homes out there right now and that's probably because most Seller's don't want to gamble that the value of their home today will be the value of their home in 2 years. Meaning we are at an all time low in home prices and in 2 years we may see prices of our homes rising. You normally will see the "Rent to Own" type homes in a market where the home prices are higher.
I hope this helps answer some of your questions. Of course each and every situation is different and depends on your personal circumstances. It is always a great idea to talk to your lawyer and a Lender to find out how to start getting back on the road to homeownership. Good Luck to you in your new future.

Grace Rosenberger
DRE #01295350
Cell: 951-295-6422
0 votes
Harold Sharpe, Agent, Menifee, CA
Mon Jan 25, 2010
Hi Elizabeth,
For the most part, buying a home the usual way, is on the back burner,....
Chapter 13 bankruptcy: 2 years from discharge date or 4 years from dismissal date
All other bankruptcies: 4 years from either the discharge or dismissal date.
If you happen to have hidden a couple hundred thousand in cash you may have a shot.
Rent to own????
This is one I do not look into but you can.

I wish you the best in your home search.
I hope you will try to get your credit up asap for your next home.

Harold Sharpe
So Cal Homes Realty
0 votes
Anna M Brocco, Agent, Williston Park, NY
Mon Jan 18, 2010
Not knowing any of the details, type of bankruptcy, assets left if any etc., why not ask your attorney.
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