I posted my story on the bankruptcy board and a member replied that our income and family size will cause issues for getting a mortgage.
We have been working on rebuilding credit for 12mos and have only seen a 4pt rise in our mortgage qualification score. Such a disappointment! The broker and a BK lawyer have both suggested Chapter 7 as the total debt load is insurmountable for us.
We want to buy a home to provide stability and roots for our kids (my 8th grader is in his 9th school as we have chased rentals).
I understand that we will have to wait 2 years from the discharge date. It is my plan to use that time to save every penny we can and rebuild the credit scores.
With $2,946 gross monthly income, a family of 8 and $39,571.60 federal student loans ($0 monthly payment, though considering $396 for DTI calculation)... is there any point to actually trying?
The mortgage broker we were working with told us we will qualify for approximately $120k with $5k taxes and $1,800 insurance with 3.5% down after 2 years from date of discharge with a middle score of 620. That will put our mortgage, taxes and insurance at about $1,200/mo which we have been paying for a year at this point with no issues. We have also been told we will need 6mos reserves after down payment and closing costs.
Thank you for your help and guidance, experience and thoughts.
The information that you already received fromn your loan officer appears to be accurate except for the 6 months of reverses. It must be an overlay at his specific lending institution. 6 months of reserves is not a requirement.