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Can I Get a Mortgage?

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kberly69
Frequent Contributor

Can I Get a Mortgage?

1. Mortgage Credit Scores:  
    • 703  716  699 (probably a little higher now- regular FICO scores went up a couple points since the 8/31 report)
2. Credit Negatives: If you have any, what negatives are on your credit reports. For each negative, please provide:
    • Type: Chapter 7 BK discharged 10/6/16, foreclosure 3/12
3. Gross Income.  Gross income (before witholdings, medical/dental, 401k contributions), per your IRS tax returns, is what is important when qualifying, not net income. 
    • About $60K
4. Source of income.  Where is the income coming from? List each source.
    • Employment- salaried, with same company for over 20 years
5. Monthly debt payments
    • $325
7. Assets/ReservesThis is to determine how much you could potentially have as a down payment and also as reserves to help qualify (for example if your debt to income ratio is high this could help qualify you anyway).
    • Currently living in the home I wish to purchase. Parents bought home, I pay mortgage directly to the bank (have records of payments made). Home purchased for $152K, $30K down, currently owe around $120K. Based on my own assessment of comps, probably worth around $165 now. Parents willing to gift the equity.
    • I likely won't have much to contribute to a downpayment
8. Location:  This is to determine govt guaranteed loan limits, what special programs might be available for you, how much property taxes & homeowners insurance will likely be, amongst other items.
    • Michigan
9. Property Description: 
    • Single family home 

11. Occupancy
    • Primary residence
      • 3 people living there
12. Transaction Type.  Purchase
 
Questions:  
I know I am not eligible for an FHA until 10/18 and USDA until 10/19. Is there any way to get something going sooner? It's just killing me to pay the non-homestead tax rate without the ability to get the mortgage in my name even though I can afford it and my scores are decent.
It seems it might make sense to wait the additional year for USDA- correct?
I'd appreciate any insight you can give. Thanks!
 

 

 

 


CH7 BK Discharged 10/16
Oct/Nov 2016: EQ 632 TU 532 EX 573
Feb 2017: EQ 695 TU 673 EX 670
March 2017 EQ 702 TU 676 EX 673
April 2017 EX 683 (TU & EQ unknown)
May 2017 EQ 695 TU 685 EX 693
Feb 2018 EQ 704 TU 687 EX 694

9/24/20: 4 years from discharge FICO 8: EQ 751 EX 765 TU 766 FICO 9 EQ 814 EX 804 TU 821
Message 1 of 3
2 REPLIES 2
VALoanMaster
Valued Contributor

Re: Can I Get a Mortgage?


@kberly69 wrote:
1. Mortgage Credit Scores:  
    • 703  716  699 (probably a little higher now- regular FICO scores went up a couple points since the 8/31 report)
2. Credit Negatives: If you have any, what negatives are on your credit reports. For each negative, please provide:
    • Type: Chapter 7 BK discharged 10/6/16, foreclosure 3/12
3. Gross Income.  Gross income (before witholdings, medical/dental, 401k contributions), per your IRS tax returns, is what is important when qualifying, not net income. 
    • About $60K
4. Source of income.  Where is the income coming from? List each source.
    • Employment- salaried, with same company for over 20 years
5. Monthly debt payments
    • $325
7. Assets/ReservesThis is to determine how much you could potentially have as a down payment and also as reserves to help qualify (for example if your debt to income ratio is high this could help qualify you anyway).
    • Currently living in the home I wish to purchase. Parents bought home, I pay mortgage directly to the bank (have records of payments made). Home purchased for $152K, $30K down, currently owe around $120K. Based on my own assessment of comps, probably worth around $165 now. Parents willing to gift the equity.
    • I likely won't have much to contribute to a downpayment
8. Location:  This is to determine govt guaranteed loan limits, what special programs might be available for you, how much property taxes & homeowners insurance will likely be, amongst other items.
    • Michigan 
    • Charlevoix County
9. Property Description: 
    • Single family home 

11. Occupancy
    • Primary residence
      • 3 people living there
12. Transaction Type.  Purchase
 
Questions:  
I know I am not eligible for an FHA until 10/18 and USDA until 10/19. Is there any way to get something going sooner? It's just killing me to pay the non-homestead tax rate without the ability to get the mortgage in my name even though I can afford it and my scores are decent.
It seems it might make sense to wait the additional year for USDA- correct?
I'd appreciate any insight you can give. Thanks!
 

 

 

 


Hi Kberly69,

 

I see a couple of possible issues (see red text above) that may cause problems.

 

1) You had a foreclosure in 2012 followed by a BK in 2016. Generally, when it comes to FHA, underwriters are loath to approve a file where you have any type of derogatory hits after a major derog like a BK or foreclosure & in your case you have a major followed by another major 4 years later.

If you have some type of extenuating circumstance for either or both of these situations, it may not be a problem & you may not need to wait until next year.

 

2) The gift of equity "may" be an issue with USDA but I'd have to do a little research to determine for sure if it would be a problem.

It's possible to get approved for a USDA loan 2 years out of a BK as long as you can get an approval through GUS. You would also need a lender that doesn't have an overlay of 3 years post BK.

 

 

VA Mortgage Expert. Mortgage Banker lending in All 50 States.
VA, FHA, USDA. Jumbo, Conventional.
CAIVRS Expert.
Message 2 of 3
kberly69
Frequent Contributor

Re: Can I Get a Mortgage?


@VALoanMaster wrote:

@kberly69 wrote:
1. Mortgage Credit Scores:  
    • 703  716  699 (probably a little higher now- regular FICO scores went up a couple points since the 8/31 report)
2. Credit Negatives: If you have any, what negatives are on your credit reports. For each negative, please provide:
    • Type: Chapter 7 BK discharged 10/6/16, foreclosure 3/12
3. Gross Income.  Gross income (before witholdings, medical/dental, 401k contributions), per your IRS tax returns, is what is important when qualifying, not net income. 
    • About $60K
4. Source of income.  Where is the income coming from? List each source.
    • Employment- salaried, with same company for over 20 years
5. Monthly debt payments
    • $325
7. Assets/ReservesThis is to determine how much you could potentially have as a down payment and also as reserves to help qualify (for example if your debt to income ratio is high this could help qualify you anyway).
    • Currently living in the home I wish to purchase. Parents bought home, I pay mortgage directly to the bank (have records of payments made). Home purchased for $152K, $30K down, currently owe around $120K. Based on my own assessment of comps, probably worth around $165 now. Parents willing to gift the equity.
    • I likely won't have much to contribute to a downpayment
8. Location:  This is to determine govt guaranteed loan limits, what special programs might be available for you, how much property taxes & homeowners insurance will likely be, amongst other items.
    • Michigan 
    • Charlevoix County
9. Property Description: 
    • Single family home 

11. Occupancy
    • Primary residence
      • 3 people living there
12. Transaction Type.  Purchase
 
Questions:  
I know I am not eligible for an FHA until 10/18 and USDA until 10/19. Is there any way to get something going sooner? It's just killing me to pay the non-homestead tax rate without the ability to get the mortgage in my name even though I can afford it and my scores are decent.
It seems it might make sense to wait the additional year for USDA- correct?
I'd appreciate any insight you can give. Thanks!
 

 

 

 


Hi Kberly69,

 

I see a couple of possible issues (see red text above) that may cause problems.

 

1) You had a foreclosure in 2012 followed by a BK in 2016. Generally, when it comes to FHA, underwriters are loath to approve a file where you have any type of derogatory hits after a major derog like a BK or foreclosure & in your case you have a major followed by another major 4 years later.

If you have some type of extenuating circumstance for either or both of these situations, it may not be a problem & you may not need to wait until next year.

 

2) The gift of equity "may" be an issue with USDA but I'd have to do a little research to determine for sure if it would be a problem.

It's possible to get approved for a USDA loan 2 years out of a BK as long as you can get an approval through GUS. You would also need a lender that doesn't have an overlay of 3 years post BK.

 

 


Hi and thanks- the foreclosure and BK were both a result of a divorce. Not extenuating, but stemming from the same trigger. I was stubborn and unrealistic in terms of what I thought I could do to pay back by creditors so I waited until it was utterly unmanageable. I hope that would matter to a lender- I wasn't doing anything stupid between the foreclosure and the BK, just trying to avoid it.

Any ideas of lenders who would touch me for a USDA loan next fall (2 years post BK)? By then I would expect very respectable FICO scores.  


CH7 BK Discharged 10/16
Oct/Nov 2016: EQ 632 TU 532 EX 573
Feb 2017: EQ 695 TU 673 EX 670
March 2017 EQ 702 TU 676 EX 673
April 2017 EX 683 (TU & EQ unknown)
May 2017 EQ 695 TU 685 EX 693
Feb 2018 EQ 704 TU 687 EX 694

9/24/20: 4 years from discharge FICO 8: EQ 751 EX 765 TU 766 FICO 9 EQ 814 EX 804 TU 821
Message 3 of 3
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