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Can we get a mortgage?

My wife and I are trying to move and purchase a home. We both have discharged Chapter 7's from 2011. Her's was due to previous divorce debt and mine was due to enormous medical bills. Our credit scores now are in the range of 640-680 so have come a long way in two years. We are trying to find a lender that can work with us as our current home was discharged in my Chapter 7 (only in my name). We currently live in the home and it was modified and we are current on the mortgage although I never reaffirmed the debt. We are severely upside down in the home and spoke to BOA yesterday and they confirmed I did not reaffirm the debt. Their suggestion was I could just walk away or could keep paying. Either way I am not liable to them. So my question is can we qualify for a new mortgage and how will underwriters view my current home as it discharged but never foreclosed? We have found a new home for around $90-100k. We make $95k a year.

Thanks for input and any offers to help.
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September 19 2013 - Buffalo
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Ok. Would you be interested in helping us out?
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September 19 2013
Credit reported debt only. 
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September 19 2013
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Steve - In figuring DTI do you only add the credit reported debt? For example all our loans, credit cards and not the monthly bills like utilities, insurance, daycare and what have you?

I believe your located in Bloomington but my wife and I would like to sit down and go over this with you if we can find a time to get down that way. We are in the Buffalo area so a bit of a drive.
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September 19 2013
Yes, you would add your current PITI payment to your total debt ratio, as well as the new mortgage payment and all other payments you currently have.  Make sure the total is less than 45% of your gross monthly income.

For example:
Gross monthly income is $7,916
45% of that is $3,562
IF Current mortgage + other debts + new mortgage = $3,500 = good to go.
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September 19 2013
I see that Steve Furlong has answered your question.  As I Realtor I recommend Steve to my clients.  He is great with service, suggests the best products, and gets the deal completed.  Go see him.
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September 19 2013
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To clarify my wife of a year is not on the existing home mortgage/ deed/ homestead. I do not believe she could qualify on her own only because of our combined debt of vehicles. She would need my income to offset that for the 36% DTI. I certainly can rent out our current home (which I would like to do) but do I need to figure the current home into our application? My wife's yearly income is $36k.
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September 19 2013

Just to clarify....your wife is not on the current mortgage with BOA? If not, what is her annual income and monthly debts? It is possible she could qualify for an FHA mortgage on her own.

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September 19 2013
Yes you can.  See FHA mortgagee letter regarding economic events:
Search for:
Mortgagee Letter 2013-26

However, as for your current home, if you stop making payments they can still foreclose as the mortgage lien is still on the property (the promissory note, not the mortgage, is what is included in the bankruptcy).

Your challenge will be dealing with the existing home, not qualifying for a new one.  Since you are married, you both have ownership interest in your current home if it is homesteaded, so it wouldn't make a difference if she purchased a new home on her own.

If you retained your current home, you will need 6 months' worth of payments for both mortgage payments (even though you don't actually have a mortgage payment now).  You will also need to qualify for both payments.  Perhaps you could rent your current home?
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September 19 2013
 
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Can we get a mortgage?
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September 19 2013 | 8 answers
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