Chapter 13 discharged and need a Home Loan.

[yodi2007]

Hello everyone I have finished my CH 13 with only 3 missed/late payments, but paid out early when the trustee allowed me to. I have around 20k in savings account and will have another 15-20k hopefully bytime I receive my discharge letter from the trustee. We have adopted and have custody of our grandson. We also have a disabled child (autism) and he receives 900/month in disability. I gross about 6500/month before any overtime. MY current DTI is 63% that I can easily get down to 20%. My credit scores are from 617-651 from all three. I am a veteran and will be a first time homebuyer. No car payments, cars were paid in cash.  

How hard will it be to get a mortgage? The homes we are looking at in my area are 200-320k for 4 bedrooms/2 baths in nice neighborhoods.

[4sallypat]

First thing you need to do is find a good mortgage broker that specializes in VA loans.

Broker is best to prepare and take a look at your current & future financial health.

Finding a good broker that won't just take you for a spin then dump you is a tough one.

It's like a job interview where you have to interview brokers to find a good one that will stick with you.

Mine held on for over 6 months until we got our home - finally!

[jmw1]

---

@yodi2007 wrote:

Hello everyone I have finished my CH 13 with only 3 missed/late payments, but paid out early when the trustee allowed me to. I have around 20k in savings account and will have another 15-20k hopefully bytime I receive my discharge letter from the trustee. We have adopted and have custody of our grandson. We also have a disabled child (autism) and he receives 900/month in disability. I gross about 6500/month before any overtime. MY current DTI is 63% that I can easily get down to 20%. My credit scores are from 617-651 from all three. I am a veteran and will be a first time homebuyer. No car payments, cars were paid in cash.  

How hard will it be to get a mortgage? The homes we are looking at in my area are 200-320k for 4 bedrooms/2 baths in nice neighborhoods.

---

The basics of this is that you need FHA or VA manual underwriting until two years post-discharge. Furthermore, you can't have any late payments in the last 12 months including the trustee payment along with any 30+ lates credit card payments.  1x30 in the last 12 is disqualifying. Late is actually 30 days after the due date, so if the trustee payment was due Jun 15th,  you're ontime if the trustee posted the payment on July 14th so the TFS Billpay date doesn't count. If your late payment was suspended or postponed with written agreement by the trustee, then you're OK.  You will have to submit the trustee payment documentation during underwriting since they can't pull this from the credit report. Very few lenders do manual underwrite chapter 13s. I'd highly, highly suggest shopping rates with at least 3 lenders that do manual underwrite chapter 13s since the rates can vary a lot in this niche area.

[VALoanMaster]

---

@yodi2007 wrote:

Hello everyone I have finished my CH 13 with only 3 missed/late payments, but paid out early when the trustee allowed me to. I have around 20k in savings account and will have another 15-20k hopefully bytime I receive my discharge letter from the trustee. We have adopted and have custody of our grandson. We also have a disabled child (autism) and he receives 900/month in disability. I gross about 6500/month before any overtime. MY current DTI is 63% that I can easily get down to 20%. My credit scores are from 617-651 from all three. I am a veteran and will be a first time homebuyer. No car payments, cars were paid in cash.  

How hard will it be to get a mortgage? The homes we are looking at in my area are 200-320k for 4 bedrooms/2 baths in nice neighborhoods.

---

Hi @yodi2007,

When was your last late payment?

Do you have a clean, 24 month rental/housing history? Since your loan has to be manually underwritten, you'll have to provide a rental/housing history with no 30+ day late payments.

How are you calculating your DTI?

63% sounds high based on no car payments and having just paid off a chapter 13 BK.

If we take your income, $6,500 + the $900 in SSID, your income is $7,400 and 63% of that is $4,662.00.

Normally you wouldn't be as concerned about the DTI on a VA mortgage but, because it's a manual underwrite, you're going to be capped at a max of 58%.

You mentioned overtime, do you have a 2 year history of earning OT?

[yodi2007]

---

@4sallypat wrote:

First thing you need to do is find a good mortgage broker that specializes in VA loans.

Broker is best to prepare and take a look at your current & future financial health.

Finding a good broker that won't just take you for a spin then dump you is a tough one.

It's like a job interview where you have to interview brokers to find a good one that will stick with you.

Mine held on for over 6 months until we got our home - finally!

---

What was tough for you during your road to purchase a home with a broker?

[yodi2007]

---

@jmw1 wrote:

---

@yodi2007 wrote:

Hello everyone I have finished my CH 13 with only 3 missed/late payments, but paid out early when the trustee allowed me to. I have around 20k in savings account and will have another 15-20k hopefully bytime I receive my discharge letter from the trustee. We have adopted and have custody of our grandson. We also have a disabled child (autism) and he receives 900/month in disability. I gross about 6500/month before any overtime. MY current DTI is 63% that I can easily get down to 20%. My credit scores are from 617-651 from all three. I am a veteran and will be a first time homebuyer. No car payments, cars were paid in cash.  

How hard will it be to get a mortgage? The homes we are looking at in my area are 200-320k for 4 bedrooms/2 baths in nice neighborhoods.

---

The basics of this is that you need FHA or VA manual underwriting until two years post-discharge. Furthermore, you can't have any late payments in the last 12 months including the trustee payment along with any 30+ lates credit card payments.  1x30 in the last 12 is disqualifying. Late is actually 30 days after the due date, so if the trustee payment was due Jun 15th,  you're ontime if the trustee posted the payment on July 14th so the TFS Billpay date doesn't count. If your late payment was suspended or postponed with written agreement by the trustee, then you're OK.  You will have to submit the trustee payment documentation during underwriting since they can't pull this from the credit report. Very few lenders do manual underwrite chapter 13s. I'd highly, highly suggest shopping rates with at least 3 lenders that do manual underwrite chapter 13s since the rates can vary a lot in this niche area.

---

Never had any other 30 day lates other than the Chapter 13 payments. Couldn't do automatic payments like eveything else. 

[yodi2007]

---

@VALoanMaster wrote:

---

@yodi2007 wrote:

Hello everyone I have finished my CH 13 with only 3 missed/late payments, but paid out early when the trustee allowed me to. I have around 20k in savings account and will have another 15-20k hopefully bytime I receive my discharge letter from the trustee. We have adopted and have custody of our grandson. We also have a disabled child (autism) and he receives 900/month in disability. I gross about 6500/month before any overtime. MY current DTI is 63% that I can easily get down to 20%. My credit scores are from 617-651 from all three. I am a veteran and will be a first time homebuyer. No car payments, cars were paid in cash.  

How hard will it be to get a mortgage? The homes we are looking at in my area are 200-320k for 4 bedrooms/2 baths in nice neighborhoods.

---

Hi @yodi2007,

When was your last late payment?

Do you have a clean, 24 month rental/housing history? Since your loan has to be manually underwritten, you'll have to provide a rental/housing history with no 30+ day late payments.

How are you calculating your DTI?

63% sounds high based on no car payments and having just paid off a chapter 13 BK.

If we take your income, $6,500 + the $900 in SSID, your income is $7,400 and 63% of that is $4,662.00.

Normally you wouldn't be as concerned about the DTI on a VA mortgage but, because it's a manual underwrite, you're going to be capped at a max of 58%.

You mentioned overtime, do you have a 2 year history of earning OT?

---

I didn't mean DTI. I meant actually CC Utilization of 63%. My DTI should be extremely low, maybe around 20-30%. My income the last 4 years are as follows 71k, 75k, 85k, and 120k. I paid cash for a slightly used car for my wife and spent another 8-10k for adoption. Planning on another 20ishK in savings by time the letter arrives.