topic Re: New Home mortgage after BK in Mortgage Loans

New Home mortgage after BK

sprint100 — Mon, 14 Jan 2013 04:21:09 GMT

Hello all

I filed Ch7 BK that was discharged in April of 2012. My wife and I are moving to Denver within the next 3 months. Since I have heard of FHA mortages being approved before the 2 year mark but not being able to close until the 2 year mark is reached. My question is, if there is a home that has to built and will take 7 or 8 months to complete can we be apply and be approved 5 or 6 months in advance of that 2 year mark?

Re: New Home mortgage after BK

tooleman694 — Mon, 14 Jan 2013 04:24:20 GMT

Yes you can do that, you will get a condition that says you can't close till that date.

Re: New Home mortgage after BK

StartingOver10 — Mon, 14 Jan 2013 12:58:25 GMT

Be careful here, the underwriter looks at the time period from your BK filing date to your new loan application date.

If you didn't surrender a home in the BK or lose it to f/c than the min period is 2 years. There are rare exceptions for extenuating circumstances that will allow for less than two years.

Re: New Home mortgage after BK

MovingForward_2012 — Mon, 14 Jan 2013 13:56:41 GMT

Actually, I am in Denver and the lenders I have worked with here have told me it has to be 2 years from the discharge date not the filing date to prequalify.

OP, there are a ton of new homes being built out here and we are on Contract for a brand new home finished late last year.

Go to www.chfainfo.com to find out about the CHFA homeopeners plus 1st/2nd 30 year fixed mortgages through Colorado's Housing Authority. They will roll your required 3% down and closing costs into a 2nd mortgage! We are going through them for our home loan and have to only come out of pocket $2,500 for a $347,900 home!

Welcome to Denver! :-)

Re: New Home mortgage after BK

tooleman694 — Mon, 14 Jan 2013 14:12:40 GMT

The way I understand it, you can still prequalify but you can't actually close till it has been discharged for 2 years.

I have something kind of like this going on, I prequalified but I can't close till April thats when the time is up for the baddie I have.

I got my DU approval, went thru underwriting and approved but my condition was that closing had to be April.

Re: New Home mortgage after BK

MovingForward_2012 — Mon, 14 Jan 2013 14:14:20 GMT

Re: New Home mortgage after BK

MovingForward_2012 — Mon, 14 Jan 2013 14:19:05 GMT

You're right tooleman now that I remember it correctly. I pre qualified in July but couldn't move forward until the BK 13 was discharged for 2 years. It was deleted off my report in Oct as it hit the 7 year mark in Oct. I didn't know I qualified to close in Oct and found out I was good in Dec, 1 month before the 2 year mark from discharge.

Re: New Home mortgage after BK

tooleman694 — Mon, 14 Jan 2013 14:23:10 GMT

Yup yup, so if you plan it right. You could wait it all out as your new home builds.

This is what we are doing.

Re: New Home mortgage after BK

JM-AM — Mon, 14 Jan 2013 14:51:55 GMT

As mentioned earlier it still depends on circumstances.

Not everyone qualifies.

Even when you can try to get the process started in advance it can be limited to 3-6 months.

Re: New Home mortgage after BK

sprint100 — Mon, 14 Jan 2013 14:55:38 GMT

Thanks for all the info:smileyhappy:

Re: New Home mortgage after BK

tooleman694 — Mon, 14 Jan 2013 14:58:28 GMT

I would think you would need a DU approval before you can move forward.

Re: New Home mortgage after BK

MovingForward_2012 — Mon, 14 Jan 2013 16:59:31 GMT

What does DU stand for?

OP, most preapprovals are only good for 120 days. Not sure how that works if you are building a house that you can't close on until much later. I would check what the builder's requirements are in terms of what they need as a warm fuzzy before they will start to build your home. I'm guessing you can sign a contract even though you are not approved to close?

Re: New Home mortgage after BK

tooleman694 — Mon, 14 Jan 2013 17:40:52 GMT

DU = Desktop Underwriter

Its the tool the loan officers use to get your pre-approval.

They plug in all of your info hit the button and you get your approval.

Re: New Home mortgage after BK

sprint100 — Mon, 14 Jan 2013 17:44:38 GMT

MovingForward_2012, my plan is to go apply around that 3 month mark. My main concern is seeing something we like and missing out on it because of a few months.

Re: New Home mortgage after BK

MovingForward_2012 — Mon, 14 Jan 2013 20:33:15 GMT

Ah yes! I know what that is now. They did that for me on 1/5. And now it is in underwriting. I'm not sure OP if the DU will come back okay because of the BK. When I did a prequalify check in July, and they just ran my credit and said my score qualified but my BK wasn't discharged long enough yet. You need a preapproval letter to make an offer and when I got mines, they did a DU for that. Also if they did a DU early, I'm not sure if it would come back preapproved or not??? I do know there is a housing shortage in Denver Metro and they are putting up houses as fast as they can so said my builder. And he also said there is a shortage of materials and when that happens, prices go up and that additional cost is passed onto a buyer.

Re: New Home mortgage after BK

chasmith — Tue, 15 Jan 2013 12:47:47 GMT

I never found an FHA lender who would take an application before two years from BK7 discharge, even the one who goes to seminars on recovering from BK...

I understand it's from filing for BK13 but haven't been there so can't say for sure.