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want to buy a house with FHA post bankruptcy

I am going to be 2 years out of bankruptcy in a few months. I want to qualify for FHA. Can I get pre-approved a few months before?

Samantha's picture
Samantha | Joined: September 16, 2005 11:59 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi,

You can qualify provided you had valid reasons for BK. Under FHA guidelines you are allowed to [url=http://www.mortgagefit.com/Mortgage-Basics/do-i-qualify-for-a-mortgage.h... for a mortgage[/url] after 12 months post bankruptcy if you were forced to file BK due to circumstances that were beyond your control.

Also you should have reestablished your credit since then and had no negatives after that.

God bless you.

For MortgageFit,
Samantha

Like | Dislike | Share | Posted: Thu, 02/04/2016 - 23:59 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

ok thanks. I feel I had valid reasons as I lost my employment due to health problems and had hard times to meet the payment. I filed ch 7. Now is it going to be the filing date or the discharge that will be considered for the mortgage to be pre-approved? I have had good results in reestablishing my credit. One more thing that I would like to know is what would be the best score to apply for it? I will be reaching 700 possibly in a few months from now. Will it be a good to apply then?

Like | Dislike | Share | Posted: Thu, 02/04/2016 - 23:59 | Post subject:

Samantha's picture
Samantha | Joined: September 16, 2005 11:59 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi,

Normally the date that will be considered for CH 7 BK is the discharge date. It's a good sign that you have given efforts to re-build your credit.

The score doesn't matter for FHA as long as you have no negatives since the bankruptcy was discharged. FHA is not score driven. You will get the same rates as someone having a score higher than you. So, other things meeting the requirement, that shouldn't bother you.

God bless you,

For MortgageFit,
Samantha

Like | Dislike | Share | Posted: Thu, 02/04/2016 - 23:59 | Post subject:

banker0679's picture
banker0679 | Joined: November 15, 2007 10:05 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

FHA requires 24months MINIMUM from the date of discharge for chapter 7.
With chapter 13 it is 12months.

FHA doesn't have a score requirement...so you can have a 800 or a 400.
Lenders on the other hand DO have score requirements....most lenders have a 550 minimum score requirement. Your score will not determine the interest rate either.

Like | Dislike | Share | Posted: Thu, 02/04/2016 - 23:59 | Post subject:

kpatrick's picture
kpatrick | Joined: October 29, 2007 05:46 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Gettingout,

Banker is right...it is two years after the discharge of a chapter 7...and your reason for filing will bode well with FHA...they eat up financial hardship being brought on by health problems.

You need to be sure to get with an experienced broker that specializes in FHA b/c they will know how to structure your deal best. But it is also important, like Samantha said, that you have rebuilt your credit. With FHA you can use non-conforming lines of credit, like utility bills, to build your credit up.

So, again, just be sure to go with a broker that has experience with FHA and you should be fine.

Kim

Like | Dislike | Share | Posted: Thu, 02/04/2016 - 23:59 | Post subject:

uptightmortgageguy's picture
uptightmortgageguy | Joined: November 25, 2007 05:41 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

In some FHA Programs, a purchase can occur before two years but not less than twelve months if the [url=http://www.mortgagefit.com/bankruptcy/chapter7.html]Chapter 7 bankruptcy[/url] was due to circumstances beyond the customers control and if the customer has demonstrated the situation that caused the bankruptcy is not likely to reoccur. Not trying to be a troll, I was just reading my guidelines and found it again.

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michelle's picture
michelle | Joined: October 8, 2007 07:23 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi gettingout,

The others above gave some very sound advice. While FHA does usually want to see 24 months for the BK7, it is possible to obtain an FHA loan between the 12-24 month period.

As Kim said, you do have a very compelling reason for the BK. If you do decide to apply prior to the 2 year anniversary, you will probably need to provide a very detailed letter of explanation and possibly the back-up documentation to support the letter.

Great job on re-establlishing yourself after the BK.

Please let us know if we can answer any further questions.

Like | Dislike | Share | Posted: Thu, 02/04/2016 - 23:59 | Post subject:

lisa.scherzer's picture
lisa.scherzer | Joined: January 4, 2008 08:48 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

It doesn't hurt to apply now for a mortgage loan even though you are not quite 2 years out of bankruptcy. By the time you find a home, and close on your loan you should be at the 2 year mark.

Like | Dislike | Share | Posted: Thu, 02/04/2016 - 23:59 | Post subject:

willis.addo's picture
willis.addo | Joined: October 10, 2006 10:18 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

I hope this helps

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

SO - if you have a judgement - then you can still get approved but they will tell you that before you come to closing you will have to show proof that the judgement was satisfied??? My judgement is about $1000 - we were evicted from our rented home after a serious medical issue with our child occured and the insurance company refused to pay bills for the condition. We are looking to buy. We have 1 late payment on a credit card from 01/08. Mid-score is 561. We paid the credit cards to 50% so that may raise the score once it is sent to credit b's. Please answer question regarding judgement. THanks.

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brian1's picture
brian1 | Joined: June 14, 2008 05:14 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

FHA does not arbitrarily require that collection account be paid off as a condition for loan approval, but they do require that court ordered judgments be paid off before the mortgage loan is eligible for insurance endorsement. (An exception may be made if the borrower has been making regular and timely payments on the judgment and the creditor is willing to subordinate the judgment to the insured mortgage) Both collections and judgments indicate the borrowers regard for credit obligations and must be considered in the analysis of credit worthiness.
The late payment will be an issue as well

Brian

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