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First Home Purchase FHA during Chapter 13

I am looking to purchase my first home.I am in Chapter 13 and have 7 more months to go.I have been regular in my payments and never been late on any payments and my credit score is 630 ,679,699.I had to file for bankruptcy under extentuating circumstances like job loss and recession.I have a good amount saved and was looking for new houses in Mt Juliet.200k to be precise.I was wondering do I have good chance of getting a FHA loan??Any experts??
  • October 22 2010 - Mount Juliet
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Answers (9)

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Suntrust has a fine reputation nationally, but to my knowledge they are pretty restrictive.  I would search zillow for an FHA specialist in your area and/or another resource I would suggest is www.activerain.com.  ActiveRain is a real estate blogging platform and by looking there you should be able to see some posts from individual loan officers to get a feel fro who they are, what they know and how they conduct their business.  You should also google your local housing authority and find a HUD sponsored non profit that teaches first time home buyer courses.  One, the loan/lender may well require it and, more importantly, you will get some very valuable advice from a non-profit that is not trying to sell you anything.  Best to you!
  • October 22 2010
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Based on the information you have provided you could qualify for a FHA home loan.  As stated earlier you would need to get permission to acquire the debt if you are still in the bankruptcy plan.

However, it is very unlikely that you would get an automated underwriting approval due to the presence of a bankruptcy on your credit report.  This coupled with the fact that many lenders are solely depending on automated underwriting findings to approve a loan may make it difficult for you to find what you are looking for.

What you should do is call local mortgage companies and ask them if they have any investors that will do a "manual underwrite"of an FHA file. 

Any lender that has access to that should be able to help you purchase your new home.
  • October 28 2010
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Deborah, The first lender handed me a rude shock. He said  I have to be out of bankruptcy  and after 2 yrs I may qualify for a FHA. Am  I missing something.I thought I am eligible for FHA right now.Am I knocking the wrong door.
  • October 25 2010
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Deborah,
I got a quote from Local lenders just to get a feel of how  it will all tie up. I had a few questions.They all sent a quote with closing costs in 1600+ and other closing costs in 7k +. What are these?Here becoz the builder is the seller how do I get the most bang for my buck. I want to go to escrow with spending as little as possible so that  I can benefit the most. is 900+ a good mortgage for 205k house. 7500 downpayment.
  • October 24 2010
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Thanks Deborah, I dont know who I shud be talking with. Are you telling me somebody like Suntrust which is local here or anything smaller than that? I am new at this and my knowledge in this regard is thru net and TV.

  • October 22 2010
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Please clarify:  Are you buying a new construction property from a builder?  You are not looking for a construction loan, correct (impossible to get in your situation).  I strongly recommend you talk with a smaller, regional or local mortgage banker in addition to Wells Fargo.  You have to remember the "big banks" play by their own rules and you will probably have more success with a local FHA specialist.  And, the service will be far superior.
  • October 22 2010
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The fact is the house will be a construction and by the time the house will be completely constructed I will be out of my bankruptcy.First I will talk to a lender and see if I get approved, if I get approved  ,I will ask for courts permission.

Thanks Jayne and Deborah. I have no idea what sort of lenders I shud look for. Well Wells Fargo is one I am looking at. Any suggestions in this regard?

Thanks
Archie
  • October 22 2010
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Yes you can purchase through FHA.   But they do have a couple of rules.  First you have to be through the first year of the payout of the bankruptcy and you have to get the courts permission.  Here is the link to further explain it for you.
http://www.hud.gov/offices/adm/hudclips/handbooks/hsgh/4155.1/41551c2HSGH.pdf
  • October 22 2010
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You do have a good chance of qualifying for a loan.  I suggest you contact an FHA lender in your area (look for a mortgage banker who specializes in FHA, but your opportunities will be better with a correspondent lender...not the big retail banks).  FHA guides will allow you to purchase with the Chapter 13, but lender overlays may vary from lender to lender.  Best of luck to you!
  • October 22 2010
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