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I am going on 2 years since, I went through Chapter 7 Bankruptcy.

My credit score is 690.My house hold income has dropped just below 50k. I am trying to get a FHA loan. With a 3.5% down payment.  I am wondering what the average percentage rate would be.   If there is anyone that could estimate how much I could loan with the house hold income for a 30yr loan. 

Thanks,

Greatly appreciated.
  • January 10 2011 - Everett
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Answers (5)

All good advice below and there's one other thing to keep in mind.  You will almost certainly need a manual approval from an underwriter to get an FHA loan as their automated underwriting engine will most likely not issue an automated approval due to the bankruptcy.  This is nothing to be concerned with, however it does mean an actual human in underwriting needs to review your file before you'll know if you are approved.  When you pick a loan officer to work with on your approval, please be sure that they get your file to an underwriter for review.  It will take a bit longer to get you pre-approved, but it will ensure that there are no surprises from underwriting down the line.  Manual FHA approvals are subjective, so be prepared to provide a lot of documentation when making your case to the underwriter.

Good Luck, getting your credit back to almost 700 two years after a bankruptcy is fantastic! You sound like the sort of borrower FHA loans are designed to help.

  • January 11 2011
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  • January 10 2011
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You will also want to pick a loan officer and have them order and review a credit report to see if you'll qualify. While FHA generally places a 24 month period of waiting after a BK, it doesn't mean you'll qualify just because you've crossed that threshold.

Many lenders also have minimum account requirements (like you must have 3 open and active accounts for at least the last 12 months) and some don't.

A good loan officer will be glad to review your credit report with you and let you know exactly where you stand.
  • January 10 2011
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You can go on many sites to see what your payment would be.  Then take the annual taxes and divide by 12.  Then take a stab at the insurance and divide that by 12.  The monthly MI on FHA is .90%, so you will have P&I, insurance, taxes and MI.  Then take that number and add all your other monthly bills up.  That total is your "back end ratio".  It should be no higher than 50% of your gross monthly income.  Give me a call and I can walk you through this.
  • January 10 2011
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We would need to know what other debts (revolving and or installment) that you pay on a monthly basis.
  • January 10 2011
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