wanting a house soon in ch 13 worried about VOR

[blackstang932005]

I'm currently in ch 13. We have 5 payments left. We are wanting to wait until its discharged later this yr to buy a home. Im guessing it will probably be a FHA loan and will require manual underwritting. My issue is we have been paying my grandma rent (minimal monthly payment) for the last 8 yrs and paid only cash. I can pull my records from my checking account but thats all i would have. Will this be a problem? middle mortgage score currently a 661. We have been waiting a long time and want everything to go smoothly when the time comes. thanks

[Mortgage-Specialist]

Because it's a Manual Underwrite due to your Ch 13, if you paid rent, underwriting would require a VOR (Verification of Rent) from the homeowner and canceled checks from you. You cannot provide evidence of rent in your case which would be an issue if this was shown on your application.

Since you reside in your grandma's house, you'd show the lender that youve been living rent free, this way, you will not be punished for not being able to provide proper evidence.

"If the borrower is living rent free, then we would require rent free letter from owner to document 12 month housing history.  The letter from owner should also show the duration for which the borrower is staying rent free."

[blackstang932005]

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@Mortgage-Specialist wrote:

Because it's a Manual Underwrite due to your Ch 13, if you paid rent, underwriting would require a VOR (Verification of Rent) from the homeowner and canceled checks from you. You cannot provide evidence of rent in your case which would be an issue if this was shown on your application.

Since you reside in your grandma's house, you'd show the lender that youve been living rent free, this way, you will not be punished for not being able to provide proper evidence.

"If the borrower is living rent free, then we would require rent free letter from owner to document 12 month housing history.  The letter from owner should also show the duration for which the borrower is staying rent free."

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Ok great thanks. My next question would be since im currently living rent free would that cause "payment shock"? 

[Mortgage-Specialist]

As long as the lender doesn't have overlays, there will be no payment shock.