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Old 08-01-2008, 03:29 PM
 
Location: Eastport, Maine
312 posts, read 623,352 times
Reputation: 210

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We were told "no", and this is on a mortgage of only $68,000 (the total cost of the house we want to buy is $85,000 and we have 20% to put down on it).

Is this correct? Can you no longer get a mortgage if your credit is not good (we filed for bankruptcy 2-1/2 years ago), even with 20% down???

Please help!
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Old 08-01-2008, 03:44 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,098,996 times
Reputation: 1008
with fha you should....

if it was a BK 7...then it would be 2yrs from discharged date
if it was a BK 13, then it would be 12months from filing date.

You CANNOT have any derogatory remarks after your bankruptcy.

You will have a problem finding a lender that will lender less than 100 or 120k
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Old 08-01-2008, 05:28 PM
 
Location: Cary, NC
1,036 posts, read 3,628,581 times
Reputation: 503
You can still find some smaller banks that will lend down to $40,000... but there are "adjustments" to the interest rates below certain amounts, like $100,000 or $75,000. The banks do this to cover the costs since the servicing and closing of a 50k loan is the same as a 250k loan... but the interest earned on the smaller loan is a lot less.

FHA is probably the best option. Fannie Mae and Freddie Mac will now ask for at least 3 years from BK in most cases and your credit score and history to have improved. The usual choices were the BC or A- markets, but those are pretty much gone now, even with 20% down.

The main thing they will want to know is why the BK occurred. FHA are "story loans" and you have to be able to explain what happened, how things have changed and proove that it was a special circumstance and is not likely to happen again. They do not want to penalize people that had a medical emergency, family death or disability so they will allow you to buy if you can show the situation and that you have re-established credit since then.

If it was due to overspending or bad planning it is less likely to have a chance. Having saved 20% down is a good compensating factor to show you are now financially able to handle the situation, but they will still look closely at the other factors and the causes of the BK.
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Old 08-01-2008, 11:00 PM
 
Location: In The Outland
6,023 posts, read 11,504,373 times
Reputation: 3535
I never had a credit card in my life, I owe over 5K in old bills and a commercial bank just loaned me enough to pay a $hit load of back taxes plus enough to buy a commercial building with a huge private and quiet apartment above. We did however have a crappy little trailer on our own crappy little lot on an Indian reservation and our tennents there are making our payments for us. We will soon be leasing the lower commercial portion out in our new building while keeping a back shop and the apartment above for our own use.
These are good times if you have a bit of equity and shop for a bargain.
Life is good if you have even a little bit of resource, a little creativity and are willing to take a few chances.
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Old 08-02-2008, 05:12 AM
 
25,346 posts, read 37,499,457 times
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Why would you buy if your situation isn't better and you already had experience with bankrupcy? Why not wait another year or 2?

Do you know you need some room for if things break down and pay for property taxes, etc...?
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Old 08-02-2008, 07:45 AM
GLS
 
1,985 posts, read 4,741,367 times
Reputation: 2406
Quote:
Originally Posted by rickers View Post
I never had a credit card in my life, I owe over 5K in old bills and a commercial bank just loaned me enough to pay a $hit load of back taxes plus enough to buy a commercial building with a huge private and quiet apartment above. We did however have a crappy little trailer on our own crappy little lot on an Indian reservation and our tennents there are making our payments for us. We will soon be leasing the lower commercial portion out in our new building while keeping a back shop and the apartment above for our own use.
These are good times if you have a bit of equity and shop for a bargain.
Life is good if you have even a little bit of resource, a little creativity and are willing to take a few chances.
The fact that you have "never had a credit card in your life" is one indication of your life philosophy to avoid getting in debt. To a lender you certainly project a low risk of over-extending yourself. The $5K in old bills was probably interpreted in the context of how you accumulated them AND you have a track record of carrying them without defaulting.

The "crappy little trailer on a crappy little lot" doesn't sound like much, but it is a significant achievement, since you started with NOTHING when you first came from California.

You are in a rural area in Montana, where banks see you as a person, not a number.

You are buying the commercial building at an "intelligent" price (helluva deal) and your approach to renting out part of it not only bolsters the economy in the area, but demonstrates forethought in subsidizing your mortgage.

In short, if I were in charge of the bank, I would lend to you to. I agree that "these are good times" when you have a reasonable financial plan, and you have a proven track record of living within your means (no matter how meager).

In these times of bloated personal debt and entitlement attitudes, it is encouraging to see someone with the work ethic and values of the people who settled this country. Good luck in your new adventure.
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Old 08-02-2008, 09:11 AM
 
Location: Eastport, Maine
312 posts, read 623,352 times
Reputation: 210
Thanks for the info, everyone....we are going to another place on Monday to see if we can get a mortgage, so I guess only time will tell....

I'll keep ya posted as to what happens...
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Old 08-02-2008, 10:42 AM
 
Location: Baltimore
1,802 posts, read 7,072,043 times
Reputation: 1910
Quote:
Originally Posted by GLS View Post
In short, if I were in charge of the bank, I would lend to you to. I agree that "these are good times" when you have a reasonable financial plan, and you have a proven track record of living within your means (no matter how meager).
Not to be judgmental, but if I were the banker, I'd first want to know why the borrower owed a "$hit load of back taxes" before I concluded that he or she had a proven track record of living within their means.
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Old 08-02-2008, 10:59 AM
GLS
 
1,985 posts, read 4,741,367 times
Reputation: 2406
Quote:
Originally Posted by janetvj View Post
Not to be judgmental, but if I were the banker, I'd first want to know why the borrower owed a "$hit load of back taxes" before I concluded that he or she had a proven track record of living within their means.
I agree with you, which is why I included the qualifier in my post: "probably interpreted in the context...". We will have to wait until Rickers supplies further info. For all we know, the load of back taxes could have been on the commercial building prior to his arrival.

At any rate, my point was to show some enthusiasm for a positive story in light of the never-ending stream of foreclosures, credit crisis, and depressing "upside-down" mortgage reality of millions of American homeowners. I guess I just woke up this morning and was thrilled to see some behavior that I respect.
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Old 08-02-2008, 11:06 AM
 
Location: Baltimore
1,802 posts, read 7,072,043 times
Reputation: 1910
Quote:
Originally Posted by GLS View Post
I agree with you, which is why I included the qualifier in my post: "probably interpreted in the context...". We will have to wait until Rickers supplies further info. For all we know, the load of back taxes could have been on the commercial building prior to his arrival.

At any rate, my point was to show some enthusiasm for a positive story in light of the never-ending stream of foreclosures, credit crisis, and depressing "upside-down" mortgage reality of millions of American homeowners. I guess I just woke up this morning and was thrilled to see some behavior that I respect.
I can't disagree with you there! It certainly is refreshing to see something positive happen in this market.
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