Is a Mortgage a possibility in Chapter 13 with horrid credit?

[madcitymomm]

I'm just getting on top of my runaway financial situation this year.  I would love at some point to be able to buy a home.  I read that FHA may be a possibility, however I need to get my credit score to 640.  Any advise on how to do that would be helfpul-or advice on if this is just a pipe dream.  I just let my credit and finances slip while going through a very lengthy divorce-house went into foreclosure but we did sell it in 2007.  

I filed January 2012, started making payments on my plan in February 2012.

I pulled my credit score (not sure which one) and it is 541.  My credit report is a bit of a mess and yep it is all mine (well there is one adverse with a balance that should be in my bankruptcy).  I have 22 adverse things on the  report.  I have 3 public records-judgements in addition to the chapter 13 bankruptcy plan, however these amounts are included in the chapter 13.  Everything is in the plan including $150K in student loans (there will be a balance after 5 years that I will have to continue to pay on).  Student loans were in default.   I have no credit cards open-my utilitzation is 0.

Well now I am on track.  I'm sticking to my budget and my plan.  By next spring, after 1 year of payments I should have a 3.5 percent downpayment.  Some of the inquiries and adverse items should start falling off my report in 2013 and again even more in 2014.  

I make 70k and get 8k a year in child support.  I have 2 kids (single Mom).   Is 2013 a remote possibility to maybe put me into an FHA mortgage with 3.5 percent down or should I wait until 2014?

[germaine47]

Are your student loans still in default?  I was in the same position, in which I did a student loan rehab with Kentucky Hihger Education.  I could not get Mortgage with my student loans  in Default.  Girl that was the hardest thing I had to do, my loan was permenently assignged to the government in which I paid 9 consecutively on time payments, and loan was placed in good standing by Nel Net.    After that I had several collections in which  I offered a pay for delete and the Trade Lines were deleted.  Your first option is to find out exactly whats on your credit report. 

[madcitymomm]

I'm not sure about my student loans.  They are all part of my chapter 13 plan, which the court set the payment amount.  I'll still have a balance after I pay for 60 months.  I looked at my credit report and some say charge off with a balance of zero and some say part of the bankruptcy.

[webhopper]

I would suggest that you keep your chin up and visit the rebuilding forum. There are worse things than ch 13, you'll be fine. It will take a long time but your credit will eventually heal and you'll be able to get a home at that time

[ProudMomof5]

Madcitymomm...

I filed a Chapter 13 last August and let me just say that was the best thing I could have ever done.  I know it'll stay on my credit report for 7 years but just the relief of knowing that I don't have to deal with any collection agencies, etc is wonderful.  First and foremost, you have to get approval by your trustee before you can purchase a house.  Also, I was told you have to wait at least a year before you can apply for a mortgage but you also need three positive tradelines reporting on your credit reports and a score of 620/640 (depending on who you deal with).  I'm looking to buy my house next year.  I wanted to try to purchase this year but I didn't have three tradelines.  I applied for an Orchard credit card last October and was approved.  It was only for $300 but that was all I needed to get me back on rebuilding my credit.  I also opened up a fingerhut account, I was told they report to 2 out of 3 credit bureas.  I also got approved for a First Premier credit card.  I've been reading lots of negative things about this credit card but my plan is to be smart about it and not use it up or carry over any balances.  This is probably too much information but I figure it could be a little helpful.

[madcitymomm]

Thank you.  I'm going to get a secured credit card from my credit union in month.  I'll think about Orchard Bank.  I know my electric company reports so hopefully that will be a positive line.  I'm also trying to figure out the status of my student loan.  They were in default and being garnished.  The bankruptcy stopped this.  I pulled my report and they do not say they are in default but who knows.  I know I can't be in default to apply for a FHA loan.