is it possable for someone with a chapter 7 bankruptcy to get a mortgage at 7%?

Question

with only fair credit. and only 2 years into the bankruptcy

Answer 1

I think you mean two years after the bankrutpcy.

As a former mortgage company owner:

Yes, in fact you can get a better rate than this. The market rates for regular mortgage loans is no different for people with a BK versus those without it. You are either approved or denied by Fannie Mae and Freddie Mac.

The amount of time you must be out of a BK for them to approve your loan is 24 months, or two years.

Your other credit pay be causing you to get denied, but I would recommend having your mortgage person run it through AU (Automated Underwriting) anyway to see if it gets approved. You don't know until you try.

So, to answer your question, 7% is possible - just check the terms to determine how long that rate will be fixed.

PS - I read an earlier post and the ARM would not be a 5/1 or 3/1. It would be a 2/28 or 3/27. The 5/1's are for good credit through Fannie Mae.

Answer 2

Yes it is possible. However, with only being 2 years out, the 7% quoted is probably on an ARM (adjustable rate mortgage) product. The rate will stay fixed for a certain period, then adjust. IE: 2/28, 3/27, 5/1, etc. You can never tell now a days with Fannie Mae though. It will depend on what program the automated underwriting comes back with. You could be approved on an ALT A product, hence the higher rate.

By the way, "2 years into"? Did you mean 2 years discharged on a Chapter 7? Or is it a Chapter 13 that you are in repayment on? You can buy a home while in Chapter 13 as well, with approval from your trustee. You can qualify for a FHA loan.

Answer 3

It depends on the creditor. If you have a decent down payment and have taken care of your obligations since the bankruptcy, it is possible to get a mortgage for a home. Whether you can qualify for a 7% interest rate will vary according to each lender and their credit policies. You might see if you can find a mortgage broker who will shop your loan for the best terms. If you have some dings and less than good credit you will usually pay a higher interest rate than someone with excellent credit.

Answer 4

Ditto what naughty_mattress_monkey (what a name!) said.

If you do get that rate, it will be an ARM rate, not a fixed rate. It would also depend on how your current situation looks -- are you now addicted to Providian credit cards?

I'd look to a portfolio lender, one that makes non-conforming mortgages. Locally, we have Standard Federal, which was a Savings and Loan and is now owned by mortgage giant ABM Amro. I wouldn't waste my time with most banks, who fill out the same paperwork, use the same points scales, and then sell your mortgage on the open market.

Answer 5

It's going to be VERY TOUGH but you might find a independent mortgage company like east west mortgage www.eastwestmortgage.com to take you on.Just remember that the bankruptcy will be on your credit report for ten (10) years to the date after the bankruptcy was discharged.

Answer 6

If you are still in the bankruptcy than no. Was your mortgage included? have you made EVERY PAYMENT ONTIME? If so you can be qualified for a mortgage but probably not @ 7% unless you have serious equity in the home. If you have further questions I can be reached @ 631-370-2901 until 1pm eastern Time.

Answer 7

in time yes. Keep builing your credit. get a couple cards filled to 25 percent and pay minimum payments. keep it between 25 and 50 percent. if you can get any other loan do it. the more positive activity the more better ur credit gets. ya, i said more better... you want to try for a new mortguage about once a year when you are trying to get a lower rate.
one idea is to take a few grand and put it in a savings account, then get a secured loan against the money you have in that account. this is a good way to get a bank loan.
the more you pay on stuff (pay on, not pay off unless you get overwhelmed of course) the more credit u get.
you can get back, it jsut takes time

Answer 8

oftentimes a financial disaster will block any loans for a era of 7 years. in case you will get a private loan, it will be at an somewhat severe activity fee. inspite of the undeniable fact that, i might bypass forward and inquire at various banks. The worst the banks can say is "no". i wish you get the indoors maximum loan.

Answer 9

You're not supposed to get ANY new credit during a bankruptcy. You will most definitely be denied.

Answer 10

if you mean 2 years out of a bk yes you can - if you are 2 years in a bk(chapter 13) no and you would need a letter from your trustee to get anything anyway