Too good to be true?

[Anonymous]

I've not had a lucky life. Chronic illness and organ loss during prime adult years. Chapter 13 bankruptcy (discharged last month!), largely because of latent medical bills, after years of faithful effort to pay everything on time. Today, I'm an asset-less 50-something.

Still, things seem to have turned around. Twice in the past two years, colleagues have offered me favorable, first-option deals on family homesteads. The first time, the location was just too far away. This time, it's an ideal place, and I've bitten.

The FICOs pulled by a mortgage broker in mid-January show a 640s middle score, with all in the 600s. He seems certain of FHA approval for a loan pretty near to the home's value, which will allow closing costs to be rolled in (technically paid by seller). I have the 3.5% -- and more -- in hand for the down payment. And, I've signed a contract negotiated at arm's length with my friend/colleague, without aid of an agent (though looked over for both of us by friends in the realty trade).

Still, I've read the news accounts of tight credit, no lending, etc. How does someone like me get approved for a deal in today's climate? I'm almost afraid to get hopeful and actually plan for a home, fearful I'm just living a daydream.

Tell me -- is this a doable deal?

[Anonymous]

By the way, from the Chapter 13 discharge and years of frugal living during its course, I am debt-free, with a long-time, now-$51K income. Purchase price is $125,000.

Message Edited by oldhack62 on 02-03-2009 07:09 PM

[Anonymous]

Hi oldhack and welcome

I don't really know the answers to your questions. I leave that for minds on these boards that are far wiser than mine.

After reading your post, I did want to tell you that I truly hope for the best for you. In fact, I've already said a prayer for you. Sometimes the unluckiness we have in our lives can turn out to be our greatest blessings because of what we learn from the trials.

Just wanted you to know I wish you the best.

[ShanetheMortgageMan]

I don't see any issue, debt ratio looks good, credit scores are good, and if you have the 3.5% down payment then you are all good.

[Anonymous]

...Monday. So, only a couple of more days of nail-biting. In the meantime, the seller -- a colleague/friend -- has vacated the property and had it cleaned, so I'm free to occupy myself completing some 'housekeeping' preparations.

[WannaHouse]

I'll join you in a nail biting marathon! We just put in our first offer 

Congrats and I'll put in a prayer for you.

[Anonymous]

I am very excited for you, Old Hack.  I do have a question...don't you have to wait 2 years after you BK discharge for FHA? 

I am hoping to get a refi but don't know what to expect.. Our Ch 13 was just discharged in Sept. 08.

[Anonymous]

Shane can verify this, but I believe it is 2 years after the inital filing of the bankruptcy that FHA makes you wait.

[Anonymous]

Thanks to all for your good wishes -- I will let you know whether/when mine and yours are fulfilled!

I believe the 2-year wait period regarding BK involves Chapter 7 bankruptcies. According to FHA rules, a Chapter 13 filer may request permission from the court to entertain a new mortgage as soon as a year after successfully making scheduled payments.

In my case, following discharge (the successful end of case), I'm good to go as far as a lender will let me.

Message Edited by oldhack62 on 02-27-2009 09:37 PM

[Anonymous]

Well, it's done! Papers signed today, keys swapped, champagne flutes tipped. To boot, I wound up with the lender owing me cash at the table, since the closing figure was revised downward a couple of times during the day. (Of course, now I owe the lender plenty more.)

Thanks for your wishes and support and, now, the adventure begins...