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I cant get qualified for a home loan

I was discharged from a bankrupcy in 2010.  the trustee deed date is dated 2012.  I have re-established my credit, score is 700.  I have saved money.  I signed a contract on a new build townhouse and offering to put 10% down.  I have been denied an FHA loan by 3 different banks.  what are my options at this point? the home will be finished next month.
  • January 15 2014 - Saint Peters
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Answers (10)

Unfortunately, the bankruptcy waiting period did not start in 2010 but in 2012. This means that you are still currently in your waiting period and will most likely be in the waiting period until the usual 3 years is up. There is one exception when it comes to FHA loans. If you experienced an economic event (such as unemployment) that resulted in a loss of income causing you to go through bankruptcy, then your waiting period can be reduced to one year. Other than that, your best bet would be a hard money loan by a lender like myself. Either way, the best thing for you to do is to speak with a lender such as myself to see if you can get started on financing a new home. If you have any further questions or if you would like a loan, feel free to contact me.

Good Luck!
  • January 17 2014
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Profile picture for Arizona Mortgage Pro
The only glimmer of hope I see with traditional lenders is FHA's Back to Work program, which allows for just 1 year waiting period from the trustee's sale. However, it has very specific qualifications and it would surprise me that none of the three lenders you have tried already considered the option.

Best of luck! 
  • January 16 2014
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The date your waiting period began was the date the property was deeded out of your name, not the date your BK was discharged. You will need to find a hard money lender or builder financing. Or better yet, just back out of the contract and call it a day until you have waited out the minimum time frame to obtain an FHA loan - 3 years.
  • January 16 2014
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Did the builder have an in house lender on site that qualified you before you placed your offer?  If so, I would approach the builder and figure out two options.  Either backout and have them refund your deposit and or see if the builder will carry your note (Seller Financing) until you are able to qualify for a refinance.
  • January 16 2014
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First off, were you represented by a Realtor? If so why did they not have you pre-approved before writing an offer on a home? Most builders request a pre-approval letter upfront as well, or proof of funds.

I am sorry that you are going through this it is nothing to be ashamed of because we all make mistakes in life and life happens and people lose jobs & financial things change in life. Congrats on working on your credit and working towards future goals but SHAME on the builder and/or Realtor involved in this for not doing their job and making sure you can qualify for this home before they let it go this far and get your hopes up!

Good luck!
  • January 16 2014
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Profile picture for Gabilan Properties
Your options are to pay cash or find a hard money lender! You do not and will not qualify for some time assuming you change your habits!

What part of the "not approved" process do you not understand? A BK and foreclosure do not bid well to convince  a lender that you are worthy of a loan.

I suggest you contact the builder of the home you have foolishly tried to buy and tell them you are unable to complete the deal. Hopefully you have a minimum of good faith funds.

Spend the next few years continuing to improve your credit and financial position and save a minimum of 20% for a down payment as well as a 6 month reserve fund. Otherwise I see you in the same position 5 years from now.

Owning a home is a great thing to strive for, but only when you are in a position to do so.

Sorry to be so blunt.

Good luck in the future.

  • January 15 2014
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The trustee date is the date that the banks look at to see if you qualify. Your best option is to find a bank that would be willing to do an "in-house" loan which means they can't sell it. Local banks are usually willing to do this for their clients. Usually this is a fixed rate for a certain number of years 5-7 then it balloons and you need to refinance or it goes to a variable rate. Keep in mind the interest rate is higher too. Good-luck
  • January 15 2014
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Profile picture for seanbccam
Conventional loans do allow for financing up to 95 % of the value of a single family home. If the property is located in NY,NJ, CT or FL , please feel free to contact me.  if not,  my advise would be to work with a local mortgage broker in your town.

Hope this helps!  wish you best of luck.

Sean Basit
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  • January 15 2014
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I lost my home in the bankruptcy.  it was a conventional loan.   I was told I didn't qualify for an FHA because the trustee deed date is dated Jan 2012, so I would need to wait until Jan 2015 before they would qualify me.  Even though the discharge date is Jan 2010.  I am trying to find a lender that will finance me NOW.  Any words of advise?
  • January 15 2014
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You need to find out specifically why you were denied credit. Did you lose a house in the bankruptcy, if so and it was an FHA financed house, then you will not be able to get another FHA loan. I had a client that had a bankruptcy and lost a house in it but it was a VA loan so he was able to get an FHA loan. If you are putting 10% down, then I would suggest you get a conventional loan. It will be less expensive than an FHA loan because the pmi will be less and also FHA pmi is for the life of the loan so it never goes away now.
  • January 15 2014
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