Chapter 7 and Life after??

What is the name of your state? IN

My husband filed Chapter 7 before our marriage. We just recently received the 'order in no asset case' letter. We are waiting on his discharge letter. My question is this, how hard will it be for him to get a mortgage?? We have found a house that we would love to buy. It is 76k and it appraises out at 90k+. The owner has 'offered' to do a land contract for a year but then none of our monthly payment for this year is going to the principle so it's just like renting!! I do not know how hard it would be for him to get a mortgage, if he even could. We would have $2000-$3000 down. My credit is really bad with nonpayments and overlimits, so I know I wouldn't be able to. Please help!!!

[rainmand]

You'd be a great candidate for an FHA loan except the chapter 7 BK needs 12 months seasoning before you can apply. There are other loans available the day after the BK has been discharged, but the LTV (loan to value) will need to be in the 65-70% range. It doesn't appear you can make this range because of your minimal down payment. My advise is to enter into the land contract and replace the land contract with an FHA loan 12 months later. That way you don't loose the house you want and you also lock in the equity you've been given. It's important to have completely clean credit for those 12 months. FHA won't like it if you falter, especially because of your existing poor credit history. You should also find a loan officer that specializes in situations like yours. Select one that will put you into a "Get Mortgage Ready" program. That way you'll be working as a team during those 12 months to make sure you qualify for the loan when it's time to get it.

Raymond
Bankruptcy Loan Officer