Buying a House after Bankruptcy

•  http://www.thetruthaboutmortgage.com/

• First, any bankruptcy must be "discharged" by the court. You also cannot be in any "Credit Counseling" or other programs that take over your finances. It is actually easier to buy a house than a used car. The "lender" is looking to meet several criteria. Debt to Income ratio, Stability and time on the job. Money in the Bank and bounced check history.Any Retirement or 401 K assets. In America money solves all problems. A big down payment means business.
• With a 15% downpayment plus closing costs, you can almost always find mortgage financing 1 day after the bankruptcy is discharged and filed at the courthouse.
• Many times if you have a home already and enough equity you can refinance right out of bankruptcy altogether, or refinance out of filing. You will need a broker who is willing to do a lot of work for you and a Bank is not the place to go for you until you have rebuilt your credit rating.
• Almost all of the lenders agree that two years is the amount of time after your bankruptcy discharge that it takes to be able to get a decent mortgage. Granted, you may be able to get a mortgage sooner, but your terms (i.e. interest rate, etc.) will not be as attractive as it would be if you can wait 2 years. Considering that you'll be paying that interest for up to 30 years, it definitely saves you a lot of money if you can wait long enough after the discharge to get a good interest rate. Please note that nothing in this posting or in any other posting constitutes legal advice; this is simply my understanding of the facts, which I do not warrant, and I am not suggesting any course of action or inaction to any person.
• A Mortgage Loan Consultant area of expertise is working with people with bankruptcies, bad credit, and foreclosures. Firstly you do NOT have to wait 2 years to refinance after a chapter 7 discharge, those are for Fannie Mae loans. You can refinance a chapter 7 a day after discharge. A chapter 13 can also be refinanced before discharge since it's on a payment plan for 3-5 years from filing date. You can get a chapter 13 refinance as little as 12 months from filing, not discharge and you can payoff your chapter 13 in the process if you have enough equity in your home. Depending on your income, credit score, and trustee rating (if in a chp 13), you can qualify for upwards of 100% financing. There are major differences between a chapter 13 and chapter 7 refinance but that is for your mortgage broker to be aware of.
• It is not a question of time. If you qualify, you could buy a house the day after your discharge. If you qualify by having a large down payment, you may find yourself trying to explain to the bankruptcy judge where you got a 15% down payment (around $30,000 for the average house) when your Chapter 7 documents showed a lot less. Beware of mortgage lenders. There are still unreconstructed scam artists out there who will take your money and give you nothing but grief. There are some special programs for first time home buyers, but those usually require a history of good credit, a steady job and often some money in savings. Again, unlikely in a near post-Chapter 7 period. Pay your bills on time, save some money, keep the same job for a while. The more down-payment you can make, the better your chances - as long as you were not hiding assets in the Chapter 7.

Work on improving your credit soon after your discharge by obtaining a credit card. Keep one-third of the credit limit on the card at all times. Save your money.