First Time Home Buyer after Chapter 7 BK

Starlette · ‎10-07-2015

Hi all. Couple of questions regarding home buying and BK

How long do you have to wait to get a home loan? If you have not had a home loan in the past, would I still qualify after BK? BK discharged in 2009.

My wages wouldn't get us much so I need my husband on the loan. He has had a home that was in the BK. Resold in 2011. Any way to have him on the loan, but still have me qualify for first time home buyers?

Any help would be appreciated. If you need more information please let me know. Im not sure what to put in my message that would help with the answers. Thanks!!!!

hpotterfan77 · ‎10-07-2015

You can qualify for first time home buyer as long as he has not owned a home within the last 4 years in most cases. Usually, for an FHA loan, you must be 4 years post bankruptcy. For a straight conforming loan, it could be as little as 3 years. FHA's and state housing agency loans tend to have lower rates than a regular conforming loan. I would say as long as he is at least 4 years post bankruptcy, you should be good to go on all front. FYI, I am a mortgage underwriter and these are the CURRENT guidelines. They could change over time.

Starting Scores (9/19): EQ - 474/TU - 528/EX - 502
Current Scores (09/22): EQ - 617- TU - 638/EX - 647
Comenity M/C - $6730.00, BJs Perks MC - $2800.00, Credit One - $1200.00, Credit One - $800.00, NFCU -$6300.00, Care Credit - $5000.00, William Sonoma - $3500.00, Overstock - $4100.00, Pottery Barn - $2000.00>

Starlette · ‎10-07-2015

@hpotterfan77 wrote:
You can qualify for first time home buyer as long as he has not owned a home within the last 4 years in most cases. Usually, for an FHA loan, you must be 4 years post bankruptcy. For a straight conforming loan, it could be as little as 3 years. FHA's and state housing agency loans tend to have lower rates than a regular conforming loan. I would say as long as he is at least 4 years post bankruptcy, you should be good to go on all front. FYI, I am a mortgage underwriter and these are the CURRENT guidelines. They could change over time.

He did have a home in his name previous to our BK, but the home was put into the BK and it's been 4 years 6 months since the home was sold. 6 years since our BK. We don't have a large down payment so I was thinking the FHA would be best, but again I have no idea what Im talking about.... lol. Are there income requirements for the FHA loan? Thank you for your help!

Starlette · ‎10-07-2015

Another question. Is it possible to get into a home on a FHA loan and then turn around in like 6 months "redo" the loan and put down a large chunk of money? The reason for this question is because my mom is going to help out and give us a lump sum of money when she sells her house for us to put down, but we are up against a deadline with our landlords not renewing our lease. I'm worried that she wont sell her house in time for us to find a house and start the buying process.

Scupra · ‎10-07-2015

@hpotterfan77 wrote:
You can qualify for first time home buyer as long as he has not owned a home within the last 4 years in most cases. Usually, for an FHA loan, you must be 4 years post bankruptcy. For a straight conforming loan, it could be as little as 3 years. FHA's and state housing agency loans tend to have lower rates than a regular conforming loan. I would say as long as he is at least 4 years post bankruptcy, you should be good to go on all front. FYI, I am a mortgage underwriter and these are the CURRENT guidelines. They could change over time.

Huh? 4 years post BK for an FHA loan? You can get an FHA loan 2 years post discharge..

http://www.fha.com/fha_article?id=305

hpotterfan77 · ‎10-07-2015

To answer your first question, 6 yrs post BK is fine for CHFA. As far as the first time homebuyer option with them, I believe as long as you haven't owned a property in more than 3 years, you should be good. I'll double check on that and will respond again if I'm wrong. As far as the money for your mom, I believe you can refinance as a no-cash out refi at 6 months post purchase and include the gift in assets and just do a lower loan amount bring the money to closing with gift funds.

Starting Scores (9/19): EQ - 474/TU - 528/EX - 502
Current Scores (09/22): EQ - 617- TU - 638/EX - 647
Comenity M/C - $6730.00, BJs Perks MC - $2800.00, Credit One - $1200.00, Credit One - $800.00, NFCU -$6300.00, Care Credit - $5000.00, William Sonoma - $3500.00, Overstock - $4100.00, Pottery Barn - $2000.00>

hpotterfan77 · ‎10-07-2015

@Scupra wrote:
@hpotterfan77 wrote:
You can qualify for first time home buyer as long as he has not owned a home within the last 4 years in most cases. Usually, for an FHA loan, you must be 4 years post bankruptcy. For a straight conforming loan, it could be as little as 3 years. FHA's and state housing agency loans tend to have lower rates than a regular conforming loan. I would say as long as he is at least 4 years post bankruptcy, you should be good to go on all front. FYI, I am a mortgage underwriter and these are the CURRENT guidelines. They could change over time.
Huh? 4 years post BK for an FHA loan? You can get an FHA loan 2 years post discharge..

http://www.fha.com/fha_article?id=305

I could be confusing conforming for FHA. It's been a long day of staring at files today...lol

Starting Scores (9/19): EQ - 474/TU - 528/EX - 502
Current Scores (09/22): EQ - 617- TU - 638/EX - 647
Comenity M/C - $6730.00, BJs Perks MC - $2800.00, Credit One - $1200.00, Credit One - $800.00, NFCU -$6300.00, Care Credit - $5000.00, William Sonoma - $3500.00, Overstock - $4100.00, Pottery Barn - $2000.00>

hpotterfan77 · ‎10-07-2015

Ok, I've apparently had a long day...lol Soooo, you can do FHA 2 years post bk. I WAS confusing it with conforming guidelines. Also, there is no discount for first time homebuyer is you do an FHA mortgage so it doesn't really matter for FHA, HOWEVER with conforming, it is more than 3 years. Sorry about the confusion.

Starting Scores (9/19): EQ - 474/TU - 528/EX - 502
Current Scores (09/22): EQ - 617- TU - 638/EX - 647
Comenity M/C - $6730.00, BJs Perks MC - $2800.00, Credit One - $1200.00, Credit One - $800.00, NFCU -$6300.00, Care Credit - $5000.00, William Sonoma - $3500.00, Overstock - $4100.00, Pottery Barn - $2000.00>

Scupra · ‎10-07-2015

@hpotterfan77 wrote:
@Scupra wrote:
@hpotterfan77 wrote:
You can qualify for first time home buyer as long as he has not owned a home within the last 4 years in most cases. Usually, for an FHA loan, you must be 4 years post bankruptcy. For a straight conforming loan, it could be as little as 3 years. FHA's and state housing agency loans tend to have lower rates than a regular conforming loan. I would say as long as he is at least 4 years post bankruptcy, you should be good to go on all front. FYI, I am a mortgage underwriter and these are the CURRENT guidelines. They could change over time.
Huh? 4 years post BK for an FHA loan? You can get an FHA loan 2 years post discharge..

http://www.fha.com/fha_article?id=305

I could be confusing conforming for FHA. It's been a long day of staring at files today...lol

Ughh right there with ya!!

CH-7-Mission-Accomplished · ‎10-07-2015

@hpotterfan77 wrote:
Ok, I've apparently had a long day...lol Soooo, you can do FHA 2 years post bk. I WAS confusing it with conforming guidelines. Also, there is no discount for first time homebuyer is you do an FHA mortgage so it doesn't really matter for FHA, HOWEVER with conforming, it is more than 3 years. Sorry about the confusion.

Just so nobody is confused, FHA is two years post discharge, conventional (FNMA/FHLMC) is four years, and I believe USDA loans are 3 years.

This accounts for probably 95% of all mortgage loans. Private equity lenders not governed by banking laws can make any loan they want, and do so at higher rates. I have read where more investors are doing this since the yield is higher. There is no proof that waiting four years reduces the chance of default on a new mortgage. It is simply a penalty that may be irrational from a strictly business perspective.