Please help me !!! How can I get a mortgage ???

Asked by Sam2011, Needham Heights, MA Wed Aug 3, 2011

I had a bankruptcy in 2007 by chapter -7 and was discharged in Nov. 2007. I am self employed and doing real estate business buying and selling using Hard Money/private Lender with points and high interest. My Mid credit score 691 but I can't take mortgage due to bankruptcy and no secured job that was denied from local bank in MA. Is anybody can help me with a experience person that can help me to by house to living . I am renting now since last 2007. I buy houses and fix it and sale. But using hard lender . Your kind information would be highly appriciated. Thanks a lot.

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Scott Murphy, , 01876
Thu Aug 4, 2011
Hi, Sam.

Thanks for reaching out. With the BK being seasoned for more than 24 months now and your credit being up at a 691, this may very well be workable. Local banks can still be fussy as they may only have a limited menu of loan programs to offer. FHA may very well be an option for you and we do those here at Annie Mac Home Mortgage. We'll still need to see what we're working with for income and assets and we can do that together very easily.

Here's what we'll need to round up in order to determine what you qualify for. Pretty easy actually and we'll know within just a few minutes if we're good or if we've got some more work to do. I'll help you either way.

* 2009 & 2010 federal tax returns with all supporting schedules. We need to demonstrate enough income to support the existing liabilities on your credit report as well as the new housing payment

* (2) most recent statements for each account from which we'll be sourcing assets. We'll need to source assets for down payment, closing costs and reserves

* Recent credit report showing credit has been re-established since the BK. Don't worry. It needn't be perfect. I'll pull the report for you for when you're ready.

Please give me a shout @ 781-258-1293 when you're free and we'll see what we can put together for you. We can get together over the phone or in person if you like. Whatever works best for you.

0 votes
, ,
Thu Aug 4, 2011
Sam - your situation sounds challenging but if it's properly documented, and you have enough qualifying income, then you could potentially to qualify for a home to "live in" (it's not "living" - although it sounds very similar).

From your other question I see you've been doing real estate investing for 7 years, and back in 2007 you had a lot of trouble including losing some properties, so in addition to your bankruptcy, if any of those properties mortgages were included then that is also a foreclosure, although it's likely still long enough for them not to impede your ability to obtain a mortgage. The key is that you'll need to be at least 3 years out from the most recent foreclosure (it goes by the sale date), and then you become eligible for FHA financing. Re-established credit is needed too, but at a 691 score it sounds like you may have that part already taken care of.

For your income, being a real estate investor, you need to have claimed your gains on your tax return, i.e. "capital gains" on Schedule D of IRS Form 1040. You need to have reported capital gains income for at least the most recent 2 years AND be able to provide supporting documentation to establish that you do real estate investing for a living (copies of past Final HUD-1 statements, real estate license, etc.).

Your prior hard money financing would also need to be made note of, because underwriters will want to make sure you honored all of your payment agreements on those mortgages (particularly in the past 24 months) or else it'll decrease the chances of getting approved (mortgage late payments after a bankruptcy and/or foreclosure are very bad to have).

You also indicated in your other question that you felt like you may need a "change of scenery" to a new area, and that would play a very big part in the likelihood of an underwriter accepting your real estate investing income as being able to continue - because if you move to a completely different geographic area you don't have a proven track record of real estate investment income in that area. It's fine to say you will continue investing in Boston where you have been successful doing so (or at least since you lost your shirt), but an underwriter will certainly want to confirm you currently own real estate that you can sell for profit to make future mortgage payments. If you stay in the Boston area in my opinion you'll have easier time getting a mortgage for a home for your family to live in.

Shane Milne | Loan Officer in Orange County, CA | NMLS #81195
Direct local #'s: 949-273-4161 or 646-257-4842
Lending in all 50 states, all types of mortgages
4 votes
, ,
Thu Aug 4, 2011
The only thing I can add to Shane's answer (always excellent) is that you will need to evidence capital gains income from the previous two years AND the likelihood that the gains will continue for the forthcoming three years. In other words, if you had capital gains from the sale of three homes in each of the previous two years, the underwriter is going to want documentation that supports your ability to accomplish the same amount of capital gains
the coming three years (total dollar amount, not the number of properties). If you are doing a house at a time, documenting the future earnings potential is going to be quite difficult.

Much easier to use capital gains for income if you have the property (personal or real estate) to liquidate over time. For example, if you were a real estate investor with 30 properties and looking to retire, and could define a strategy for how you were going to sell XXXX amount through the coming years AND it was relatively the same at the previous two....a underwriter would be able to justify the use of the capital gains.
1 vote
Louis Wolfs…, Agent, Needham, MA
Thu Aug 4, 2011
Shane answers your concerns and question as well as anyone could.
0 votes
, ,
Thu Aug 4, 2011
Hi Sam

I agree with everything Shane explained below. An FHA loan would be your best bet. I work as a mortgage banker in the Boston area. If you would like to speak further to find out if you qualify please don't hesitate to contact me.

Steve Boucher
0 votes
Andrew Adams, , 01915
Wed Aug 3, 2011
In addition to finding a lender willing to lend you want them to allow you to borrow on a Spec. I would doubt you will find a lender willing to offer that type of financing.
0 votes
Christopher…, Agent, Methuen, MA
Wed Aug 3, 2011
Perhaps your hard money lender would be able to help you out?
0 votes
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