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Buying a Home

by Jason
(Kentucky)

I filed bankruptcy a couple years ago and it was discharged. I went through a rough divorce that put me under financially.

Since then, I am remarried and we both have good incomes. My credit score is around 700 even with the bankruptcy. My wife's score is better.

Our yearly income is around $102,000. We only have 1 car payment for our debt. We are considering buying my grandmas old home. My parents are selling it for $30,000.

We planned to put a $6,000 down payment on it.

My question is if I would ever be approved for a mortgage since the economic crisis and with my bankruptcy??

=====ANSWER=====

Hello Jason,

Wow!! You have done a great job of explaining your situation and helping me to see the whole picture. Thank you for that!

You mentioned you filed your bankruptcy a couple of years ago and it was discharged. Well that is where the sticky point comes into this.

If it has been at least 2 years (24 months) since your bankruptcy has been discharged, then yes you should not have a problem qualifying for a mortgage based on what you are telling me.

The whole key to this the the time since the discharge. Some lenders may require it to be 3 years (36 months) but I know that FHA normally will do a mortgage after 2 years.

Now that you have good income and credit, this should really not be a problem if you meet the guidelines mentioned above.

However I do have another thought for you to consider. You say that you want to put $6000 down on a $30,000 purchase price. That is a 20% down payment which is great.

This should make so you avoid PMI insurance. However many lenders do not want to write such small mortgages. The paperwork is the same for the small mortgage as it is for a large one.

I suggest you check out your local credit union and see if they do mortgages. This may be your best chance. Or you can take a look at my webpage best FHA home loans for more details.

If I'm not mistaken, FHA has a minimum loan amount around $5000-$10000 I think. It has been awhile since I was in the business. I do know that FHA supports the Equal Opportunity Housing lenders. They cannot discriminate against you because of the small loan size.

I just wanted to warn you about this since it may surface as a problem.

Congratulations on getting your financial house in order. Also I think it is great you are looking at home ownership.

Please pay it forward for me and tell others about my website. I'm working very hard to make this a FREE resource for first time home buyers so they can understand the mortgage process and find the loan program that fits them best.

Best Regards,

Jeff Ragan

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