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When Can I Get A Mortgage After A Chapter 13 Bankruptcy

Filing for bankruptcy will not prevent a person buying a home. Lenders have eased the requirements to purchase a home faster compared to the past.

Here is a breakdown on the waiting period after a charge date of a Chapter 13 Bankruptcy for different mortgage programs. Remember a discharge date isn’t the same as the filing date.

Conventional Mortgage (Fannie Mae & Freddie Mac):  2 years from the date the bankruptcy 13 program was completed. It the bankruptcy 13 was dismissed by a judge it is 4 years from the date.

VA - (Veteran’s Affairs) : 1 year on having a satisfactory payment has elapsed on the bankruptcy payment program. If the credit score is low it maybe difficult finding a VA lender.

USDA - 1 year from date of repayment and bankruptcy was completed.

FHA - 1 year payout has elapsed and payment performance is timely . If credit score is low it maybe difficult find a FHA lender.

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Fannie Mae Enhancements

Good news for first-time homebuyers.

Fannie Mae has relaxed their guidelines to make things better for the wholesale mortgage industry, with enhancements going into effect beginning July 29, 2017.  Here are the details:

Debt To Income (DTI) of 50 percent: No longer looking for specific compensating factors and they will just ise the desktop underwriting (DU) and will only require it to be addressed if it has a negative impact on the findings.

Disputed Accounts: Fannie Mae will consider the delinquent account in the DU results and will only require it to be addressed if it has a negative impact on the findings.

Employments Offers: Will allow borrowers to begin employment within 90 days after closing without delivering the paystub, as long as they meet all contingencies on their contract and meet a reserve requirement.

Self-Employment Documentation: Opening up the model to allow for more responses of only needing one year of 1040s when the borrower is self-employed.

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15 Year Mortgage Is A Long-Term Way of Saving Money.

For homeowners with a mortgage, the best, long term way to save money is to finance a home with a short term mortgage.

The loan’s “term” is the number of years in which it’s scheduled to be paid in full. Shorter-term loans save money in two ways:

First, mortgage rates for shorter term loans beat mortgage rates foir longer term mortgages. This means less mortgage interest paid per dollar borrowed.

Second, shorter term mortgages get paid down sooner. After 15 years you are done making payments but, with a 30 year mortgage you still have 15 years remaining.  A lot of interest gets paid in the remaining 15 years.

That kind of money is enough to pay for a college tuition, fund a retirement fund or a new vehicle.

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Mortgage rates are still extremely low and many people are taking advantage of them plus their equity increase to save on mortgage payments.

If a homeowner does the numbers to see if a refinance is truly a benefit to them there is one thing to keep in mind. “It’s not over until over”.  This simply means don’t make a few common mistakes that can result in shooting yourself in the foot.

Here are a few common mistakes to avoid.

1. Do Not Make Any Major Purchases before applying for a refinance.- Buying a shiny new vehicle, furniture, appliances, or anything of a major cost can harm being able to qualify.

2. Stay away from opening any new credit card accounts. No matter how tempting and easy getting a new account just wait until you sign the refinance loan papers.  Why? Because sometimes opening up a new account can lower your credit score.

3. No changing employment. Don’t change jobs without inquiring if this would impact the mortgage process. If a too good to be true job offer comes your way then just postpone for a few weeks before doing a refinance. The interest rate may change but not by much. 

4. Do not make any usual large deposits or withdraws from your checking or saving accounts. Everything that happens financially in your life while refinancing a mortgage can hinder the process. If all of a sudden a very large activity magically appears in any account, red flags could appear and stop the loan process until there is a documented explanation..

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hen is it time to upsize to a larger home or do you expand your current home size. If a homeowner decides to expand the living space and storage without moving does it make sense. Many times it is not the best decision to expand the current home as the area will not support the upgrade.  In other words you are spending money into an upgrade with little hope on getting it back if you decide to sell the home in the near future.

Here is a list if it makes sense to upgrade into a new home.

1. Income increase. If you current home is a starter you may be in a position to buy your dream house.

2. Family size. Is the family growing or planning to grow.  Are there grandparents?  Any college age children that will be needing a place to live?

3. Home office. Refer to the IRS guidelines where the home office can be deducted as an expense.

4. More Storage space.  It seems the older we get the more we need for storage.

5. Neighborhood change.  Usually buying a larger home the school system seems to be better.  Caution, check the property taxes and estimated utility bills as these are the hidden costs to consider buying a bigger home.

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When you are buying a home, you are also buying a neighborhood. It is important to access the last 6 to 12 months of property sales to see the probable current home value.  Also check the percentage of owner occupied properties versus rental properties.

Excellent idea to knock on doors and talk to the people living in the neighborhood and ask them for their input.  You may be surprise on how honest people can be where they live.

It is important to either walk or drive around the neighborhood at different times of the day. Check out the schools in the area and also if there is any public transportation.

Location- How long are you from work, traveling time can cost money and time. How close is the supermarket?  Shopping malls.  Traffic?

Utilities - Ask the previous owner for a utility history or ask the utilities companies plus who is the internet and cable carrier.

Schools - Usually families with children often select a school district before choosing the home.

Property value & taxes.-  Check the last 12 months of home sales in the area and how many homes are rentals and owner occupied.  When was the last time property taxes have increased and if there are both city and county property taxes.

Look for any new construction in the area as growth can mean  increase of future property value, but it can also mean higher taxes and traffic.

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https://plus.google.com/102468151441279088224/posts/2QetRyE9wsc

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What is a 1003 Loan Application?

The 1003 loan application form, also called the Uniform Residential Loan Application, was developed by the Federal National Mortgage Association, or Fannie Mae, as a standardized form for the industry. Fannie Mae and its sibling, the Federal Home Loan Mortgage Corp., or Freddie Mac, are lending enterprises created by Congress to maintain liquidity in the mortgage market. These entities purchase mortgages from individual lenders and hold the loans in their own portfolios, or sell the loans to other entities as part of a mortgage-backed security (MBS). By selling consumer mortgage debt to these federally backed entities, lenders maintain the liquidity necessary to consider for purchase, it is simpler for lenders to use the appropriate form at the outset than to try to transfer information from a proprietary form to a 1003 when it comes to sell the mortgage.

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5 Reasons Why Your Home Insurance Bill Is So High.

Do you know why you’re paying so much to protect your home? Moe importantly, have you considered the different ways you could reduce your home insurance rate?

Here are 5 factors that contribute to the price of a home insurance policy:

#1 Home’s Age and Construction Type - Insurance companies look at the age of the home, what materials were used, how many bedrooms, the square footage, type of roof and windows. Also the condition of the plumbing, heatings and electrical systems are factors.

#2 Home’s Vulnerability To Criminal Activity - Living in a high crime area is more prone to theft; the more crime there is in a neighborhood the more at risk you and your home are that results in filing a claim. There are steps to alleviate some of the concern the insurance company may have. Most insurance companies provide 2 percent to 15 percent discounts for devices that make a home safer - dead-bolts, window gates, bars and smoke/fire/burglar alarms.

#3 Firefighting Response Time - The distance between your home and a fire station is a factor that insurers mull over when figuring out your home insurance rate. The proximity of your home to a fire hydrant and to a fire station, whether your community has a professional or volunteer fire service and other factors that can affect the time it takes to put out fires.

#4 Your Credit Score - The three digit number that predicts the likelihood of you paying bills will be factor in the cost of homeowner insurance. many insurance companies use a credit-based “insurance score” when evaluating insurance applications or policies.

#5 Your Dog’s Breed - Got a dog? It could affect what you pay for homeowner’s insurance. Your dog’s breed could affect your premium since studies have shown that certain breed are more susceptible to biting than others. A homeowner insurance covers if someone gets hurt o your property.

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#quitclaim_deed    #mortgage   #realestate

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