Will My husband and I qualify for a mortgage with credit scores in the low 600’s and a recent bankruptcy?

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I want to know if my husband and I will qualify for a mortgage. WE have a bankrupcty file that was discharged on jan 2005. Our credit scores are in the low 600’s, we both hace auto loans and major credit cards that are in good standing. Our annual income is 60,000 gross but we don’t have any money for a down payment. I just don’t want to walk into a bank and look like an idiot!
We do not have alot of debt we both have reasonable car payments and a credit card each with a 300 credit limit, so i would hope that would help not hurt us by showing that we are on the right road after filing.

  1. Reply
    February 17, 2011 at 5:42 pm

    wow…maybe not a bank but there are plenty of sharks out there willing to take (literally) an arm from you.
    can you wait a year and work on lowering your debt and raising your scores, otherwise you will pay through the nose!

  2. Reply
    February 17, 2011 at 6:24 pm

    Some banks will qualify you others will not, it depends on the bank and the way they do business. You will however be at the mercy of extremely high interest rates that are variable, meaning they will increase as the standard interest rate does. Not having a down payment means having to finance more than the value of the home in order to establish and pay for closing costs. Most financial departments and advisers will tell you to wait, continue improving your credit score and make every effort to save a minimum of $ 20,000 as a down payment. If you can’t save $ 20,000 you are FORCED to purchase insurance guaranteeing the bank that you can short sell if you run in to financially trouble again. I advise wait and save.

  3. Reply
    February 17, 2011 at 7:18 pm

    The lenders qualify based on risk assessment. The prior debts are not a risk to them so they do not qualify in debt ratios etc.

    However, your credit history is a snapshot of your last 7 years and the information will still show as derragotory but icluded in the BK.

    As long as the lender sees that you have good income – debt ratios now there are loan programs available for people 1 day out of BK.

    I write a blog on the subject of credit management, mortgages, real estate trends, etc. Check it out for more information that may be helpful.

  4. Reply
    louise b
    February 17, 2011 at 7:37 pm

    not likely. my husband and i had trouble with our morgage and have no debt and hae never been bankrupt. go and see a moragage advicer in you area to find out what she/he can do for you. good luck

  5. Reply
    February 17, 2011 at 8:06 pm

    You can usually always qualify. But, your interest rate will totally suck! On today’s market, (I just looked) you would qualify for a 9.5%APR with a 10% downpayment on a 150,000 mortgage. That puts a monthly payment of 1,167.95 for 30 years for principal and interest excluding insurance and taxes. Best of luck.

  6. Reply
    February 17, 2011 at 8:37 pm

    Hi there maam,

    Yes by all means you will qualify for a mortgage, but niot at just any lender..

    You are right to think if you walk into your bank you may be perceived as an idiot… (no offense intended)

    Ther only reason i say that is becasue banks only lend to certain people.. Banks liek you to have 650 credit, thousands in the bank, NO Bankruptcy’s in the past, and i can go on ans on..

    Banks tghat you do your checking and savings with are considered Conforming lenders…

    The only lend money to peopel wiht grade A credit…

    What you need is to work with a subprime lender… A sub prime lender has program options for people wiht less then perfect credit all the way down to terrible credit..

    Now in your situation, let me make it very clear… You are NOT in that bad of a situation..

    Your credit isnt that low, and the bankruptcy is old enough that it wont be that big of an issue…

    You should be able to qualify for a 100% financing as long as you talk to the right person..

    Myself, i work with a compnayh that is partnered with multiple investors… No matter what the situation, iwe will find a home for your specific situation…

    What i suggest is that you give me a call and allow me to take a look at your current situation.. I can then give you a more detailed analisys, and you can make an informed decision…

    Feel free to cal lor email me at any time..

    Jason Fry
    Licensed Mortgage loan Officer

    Feel free to check out my yahoo answers profile… Look at some of my previous questions and answers.. I have assisted numerous people from this site both refinance and purchase a new home!!

    Goog Luck!

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