Tag Archives: mortgages

Buying A Home After Bankruptcy

Buying A Home After Bankruptcy

If you have ever experienced having to go through bankruptcy then you know just how devastating it can be.  One thing that you may be wondering is if you will still be able to attain a home loan.  Also, not to mention the thought of  buying a home after bankruptcy can still be a possibility.

Bankruptcy can make your home mortgage loan approval extremely difficult, but we at Greater Mortgage Solutions can still make it possible to get you approved for a new home loan.  Not to mention bad credit does not last forever and there are loans for bad credit being accepted all the time. These type of lenders are known as Subprime lenders and they are focused on helping individuals with bad credit in attaining the home of their dreams after bankruptcy. Do keep in mind that time does have to pass after bankruptcy typically at least 1-2 years after re-establishing some credit.

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There are an increasing number of people with poor credit who are searching  for home financing. Here are some extremely good ideas to consider after bankruptcy to expedite your approval for a home loan.

Increase your credit rating. By simply making regular payments on time or on a regular basis, the odds of your credit score rising is high. Once your bankruptcy has ended for some time, usually about 2-3 years, you should have an easier time qualifying for a smaller interest rate for a mortgage loan.

Owning an asset. Renting a home may be a simple way of putting a roof over your head, but you are essentially throwing your monthly payments away each month. Financially it is better to buy a home because over time, the value of your home will increase, thus working your way towards owning an asset. After some time of purchasing your dream house you may be able to consolidate any other debt that your bankruptcy might of not included, you can achieve this by attaining an equity loan.

Things To Consider After Bankruptcy

It can be extremely tempting to purchase an new home, vehicle, or to perform renovations after bankruptcy discharge since you have no debt left. Due to the financial relief that you had, you may probably feel like you can afford a larger house payment. Let me tell you that it is not that easy so I have provided some things to consider before you obligate yourself to a new mortgage payment.

The Pre-payment Penalty.  This penalty lasts about 6 months worth of house payments, and usually lasts anywhere from 2-3 years. Upon signing those mortgage documents you need to make those payments on time, on a timely basis.  Making those payments on a timely basis is crucial to prevent you from losing the house. So we suggest to have extra funds available for incidentals that you may need in the future

The Two Year Mark. After 2-3 years from the date of the bankruptcy discharge, mortgage loans will be much easier to attain. With a small down payment, you might even be able to get a mortgage loan without a pre-payment penalty. If you are close to the 2 year mark we advice to wait it and have more mortgage loan options.

Borrowing Too Much. Don’t spend more than you can afford. This mistake tends to be the most common that we usually get into. When deciding to buy a house, purchase one that you know you can afford. Avoid maxing out your credit or living on the edge of your income.

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Does A Mortgage Payment Include The Taxes And The Insurance ?

Mandy asks…

Does a mortgage include property tax and insurance?

My girlfriend and I are looking at buying our first home.   The house is listed at $259,900.  The estimated mortgage that is being shown on the ad for the house is only $1,320.00.  So it seems that it is very cheap for that price. 

This is the first time that we have gone through this as being first time home buyers. I’m just curious that there are no other costs and that we can afford the payment.  And that includes everything so just want to make sure we really can afford it and no surprises.  Thanks.

admin answers:

No.

Sorry but it looks like that $1,320.00 is more than likely nothing more than just the interest and principal.  Meaning that it does not include the taxes and the insurance that is most likely required by your lender for most first time home buyer loans.  Not to mention depending on what type of loan you are getting you will also have Principal Mortgage Insurance (PMI).

I know on many forms of Real Estate forms of advertising whether that be the internet or some kind of print advertising some really nice low payment.  Sorry to say that is not the full picture of what the real mortgage payment is.  Its not that its bait and switch its just not really giving the full picture.  It really is the payment for the loan but the reality is that it is not what your lender will require you to pay for the loan.  It is meant to entice you and get you to call for more information.

For example in Santa Barbara county using 1.25 of the purchase price not the loan amount then dividing by 12 will give us an estimate of your payment for taxes.   That will give you an extra $270.00 a month.  Now being that you are a first time home buyer and if you are not getting a VA loan and getting maybe a FHA loan you will be looking at PMI which is currently a 1.35% factor than divide by 12 giving you $282.00 additional on top of your loan payment.  Now you still have to get homeowners insurance which is required by the bank to have you can choose who you get insurance from, but lets just add $70.00.  So your real payment out the door with nothing else to add unless you are living in a gated area or something like that wiht homeowners Association fees (HOA) your REAL payment would be more like $1,942.00.  I hope this is more of a clear answer for you and good luck!

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What If Bought A Home And Defect Not Disclosed And Did Not Use An Agent

Betty asks…

What rights does a home buyer after closing?

We bought a house that was for sale by owner and we came without a real estate agent. Since buying the house we have had several major repairs ( that repairmen indicated were a result of ongoing problems).  Can I request that the seller pay for repairs since they didn’t provide a disclosure statement?

admin answers:

You need a Real Estate attorney.

I know that there are Real Estate transactions that occur without an agent.  Usually its because the seller does not want to pay the commission involved in paying the real estate agent.  Since it typically falls on the seller not the buyer.  But an agent looks out for you in the transaction making sure all disclosures are signed and that all information that should be disclosed is disclosed, and that is considered material.   This is not to say that there are not Real Estate agents that do not bend the rules or just try to close the deal, and that there is never an issue when doing a transaction with an agent.  No matter what occupation, you will always have some bad apples in every industry.

As for your situation typically, failure to provide such a disclosure entitles a buyer to a specific remedy,  but a lot of that may be dependent on what you signed in your contract and what you may have agreed to prior to closing.   You need to get with a real estate attorney and see what remedies are available to you.

The “problems” may be the responsibility of the former owner regardless of the Disclosure issue. If you are to make out a claim against them, you’ll probably need to prove four things ( so see a local attorney):
1. Did They KNOW about the problems ?
2. They intently not tell you ?
3. Was there no way for you to know otherwise without them telling you?

Good LUCK !!

 

 

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Why You Must Know What Is On Your Credit

Your credit can really be a factor in determining where you can go in this life , such as where you want to live or getting a business loan.  You can check your credit for free at least once a year just go to http://annualcreditreport.com.  Although it does not tell you what your scores are but it does give you an idea what is reporting.  You will have to pay to get your scores.

But you really need to know what is being reported on your credit report.  You can have relatively good credit but if the wrong thing is being reported on your credit it can actually stop you from getting a home loan.  Sure you were able to buy a car no problem.  You were even approved for that new credit card.  And you just bought your self some nice jewelry on credit.  Everyone told you that you had good credit so why worry ?

The thing is when trying to get a home loan its a whole different ball game.   What lenders are looking are so much more intense than a car loan or a credit card company.  When it comes to home loans we are a “New World” now.  Many times it can be an old account that you forgot and you disputed it.  Lets say it was collection account or it belonged to someone else so you disputed it and it is showing that the account is in dispute.   Especially if this account was an old home loan showing that it is in dispute, which happens a lot. You did a short sale on your home but its showing as a foreclosure and you disputed it.  But you never followed up on it.  Guess what till you get that taken care of your lender will not be able to proceed forward with you home loan.

This is one main reason to have your credit checked just once a year and why you need to get pre-qualified before you actually go looking at homes and then want to make an offer that day on a home that you just love that you cannot even buy, because of your credit.  Because of one account you thought went away, and is still lingering on.   Now that account may be an easy fix or not, but the seller is not going to wait long so you can get your credit in order.  This is actually very common.

Know what is on your credit so you know that there is no incorrect information and that it is updated correctly as well as before you decide to do any home shopping.  Get pre-qualified first.

 

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