How do I get a home loan with a recent bankruptcy in my history?

My bankruptcy is only a couple years old, my bank says FNMA won’t approve a home loan until I’m 4 years out from the bankruptcy. I have a good credit rating (around 680), do I have any alternatives? I have found a VERY low priced home, but can’t swing the amount on my own. Is there any place that lends that won’t be required to follow fannie mae guidelines?

By | 2013-08-28T01:19:02+00:00 August 28th, 2013|Mortgages Home Loans Interest Rate|6 Comments

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6 Comments

  1. Steve Austin August 28, 2013 at 4:54 AM - Reply

    Try to get a co-signer. Problem is many banks now won’t give a mortgage with a co-signer unless they live at the property. But some do.

  2. Bob August 28, 2013 at 4:44 AM - Reply

    FHA requires only two years after the discharge date of a chapter 7 bankruptcy. They require only one year after a chapter 13, though you will need permission from the bankruptcy court to take the loan. A link to the HUD website confirming this is posted below. Your 680 score is more than good enough, although underwriters will have very little tolerance for any delinquency after the bankruptcy. You may pay 1/8% higher rate than you would with an 800 score but the difference in the payment for a low priced home would be negligible. Not all lenders offer FHA loans, so have someone who has had a good experience with an FHA lender refer you to a good one.

    http://portal.hud.gov/FHAFAQ/controllerServlet?method=showPopup&faqId=1-6KT-188

  3. MSAD August 28, 2013 at 4:03 AM - Reply

    You will have to approach the seller and see if they are willing to do a lease/purchase agreement. That way, you lease the house for a few more years and clean your credit up and get more time between you and the bankruptcy. Then you have an option to buy the home at the end of the lease term.

  4. wizjp August 28, 2013 at 3:24 AM - Reply

    No one touches bankruptcy for less than 3-5 years out.

    Sky is blue…water is wet….fact of life

  5. loanmasterone August 28, 2013 at 2:48 AM - Reply

    You should find a mortgage banker/broker that has other investors, though Fannie Mae is one of the largest investors that purchase mortgage loan notes in the United States.

    A 680 credit score is sufficient to obtain a mortgage loan as long as you meet the other criteria for mortgage loan approval.

    You would have to do a little leg work to find a lender that would approve and lend you funds to purchase the house you have selected based on the information in your credit report and would accept a two year old bankruptcy.

    You might consider an FHA mortgage loan where the lender has direct FHA approval status. You would have to ask when you call as to the lenders status. These mortgage lenders have a little more leave way in the approval process.

    Then you would have those mortgage lenders are still doing sub-prime lending if this house is that important to you. The interest rate would be around 4.5% to approximately 5%.

    Banks are restricted on what they are able to approved based on their investor requirements.

    I hope this has been of some benefit to you, good luck.

    “FIGHT ON”

  6. Landlord August 28, 2013 at 2:11 AM - Reply

    680 is not good credit. Good credit it 800 and above.

    That said you can’t use an insured institution at all. Those all have to protect their investors assets, and lending you money would not do that. Since it is very low priced you should be able to find private funding, start with your relatives.

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