Chap 13 and need Mortgage

[SailorJulia]

What is the name of your state? Arizona

Filed Ch13 in Texas in Dec 2003; will be paying for a total of 60 months (although attorney told me it would be 49 months, the papers I got from the trustee say 60). My rather large debt load was about half taxes due to a really good year (2002) and credit card debt caused by a really bad year (2003, made less all year than my unpaid tax bill from the previous year - and I had paid estimated taxes!). We've got a house in Texas (rented), two mobile homes (rented to our adult kids), and a car loan outside of the bankruptcy.

Real estate is hot here and getting higher by the week. Sitting it out is killing me, plus we frankly just don't like renting.

My Texas attorney says that he does not anticipate any problem with the Ch13 trustee approving a reasonable mortgage so we could buy a house here - but we've asked a mortgage broker and also Wells Fargo (who holds our existing mortgage), and are hearing very pessimistic assessments on our chances. We are paranoid about lease-purchase plans (what if they don't make the payments?), and often they look like horrible bad deals to me anyway.

So - what is the sense of the forum? Give up and rent for 4 more years? Look for an honest lease-purchase arrangement? Or am I missing another option?

 

[jkaczmarek1898]

purchasing a home/chapter 13

When you have a bankruptcy and it is rather fresh, you could possible get a mortgage, but you will have a higher rate, probably the 8 or 9's and you will need a down payment of 15 to 25% depending who you are using for a mortgage. Get a good faith estimate and a truth in lending statement, the truth in lending will tell you what the APR is (annual percentage rate), this should smoke out any "crooks". You also will most likely end up with a loan that will have a pre-payment penality if your state will allow it. You will need to look at the additional cost of paying a higher interest rate, the tax write off of mortgage interest, and the possible profit of equity. Find a mortgage person with a heart and a brain!

 

[MortgageGuru]

There aer plenty of mortgage people with hearts and brains but there is no mortgage loan in existance that can help you out at this time. Loans are available for someone in Ch. 13, FHA included. But, you own other properties so that one won't fly. No sub-prime lender will touch it without 1 year history on the BK and even then, you will be capped somewhere around 65% IF there is a lender that would do it. Even then, you will have to provide cancelled checks showing the rental income for all the properties. I have yet to find a sub-prime lender that would do a loan while still in BK.