Author Topic: Bankruptcy 18 months ago--- need a mortgage  (Read 5995 times)

Xphrfer

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Bankruptcy 18 months ago--- need a mortgage
« on: July 14, 2016, 05:06:51 PM »
Hello
I'm new here I'm relocating and I am trying to buy another house
I filed bankruptcy approx 18 months ago and banks won't give me a new mortgage until I hit the 2 year mark. I have a good credit score and enough income and steady work history to qualify
I have a 20% down payment but......the bk is leaving me almost no choice except going to a Mortgage Company that wants a insane amount of extra fees. I don't want to throw money out the window and rent , but these companys want over 7.5% interest and a 3% origination fee
I can take this ridiculous loan and refi in 6 months and get a reasonable rate, except that's going to cost another 4-5k
Anyway does anyone have a suggestion how to get a mortgage without getting ripped off?

andreamac

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #1 on: July 14, 2016, 05:22:56 PM »
I don't know the reason why you filed for bankruptcy but really what do you expect? Sorry to be harsh but I would wait until the 2 years is up.
« Last Edit: July 14, 2016, 05:29:17 PM by andreamac »

pbkmaine

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #2 on: July 14, 2016, 05:40:45 PM »
Rent.

Mikila

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #3 on: July 14, 2016, 05:49:43 PM »
Rent. 

If you really do insist on getting a mortgage, then the rates and fees will be ridiculous, not because anyone is targeting you to rip you off, but because statistically you are at much higher risk of default than Never Bankrupt Ben down the road. 

The ball is in your court.

ender

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #4 on: July 14, 2016, 06:27:07 PM »
"need a mortgage" is quite strong language.

Renting is absolutely not throwing money out the window. In your case, it's going to save you a TON of money on mortgage fees if you don't buy now and instead wait.

pbkmaine

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Fishindude

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #6 on: July 14, 2016, 06:37:44 PM »
I don't know your personal circumstances, but think about what you are asking a lender.
"Hey Mr. Lender, I defaulted on my debts a couple years ago, and filed bankruptcy so I wouldn't have to pay them back.   How about giving me a loan at a great rate?"

You are lucky anyone will loan you anything, at any rate.
Work through it and rent in the meantime.

cchrissyy

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #7 on: July 14, 2016, 08:50:44 PM »
Rent until the rates you can get are reasonable again.

It't not "throwing money out the window" to rent a house. It is paying for a place to live and happily avoiding "throwing money out the window" on hugely inflated interest payments.

marty998

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #8 on: July 15, 2016, 03:38:45 AM »
Anyway does anyone have a suggestion how to get a mortgage without getting ripped off?

I hate being quick to judge and we don't know all of your circumstances BUT.... you're the one who has been "ripping off" your creditors....

Pay your debts... it's the right thing to do.

Ricksun

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #9 on: July 15, 2016, 09:26:19 AM »
I don't know your personal circumstances, but think about what you are asking a lender.
"Hey Mr. Lender, I defaulted on my debts a couple years ago, and filed bankruptcy so I wouldn't have to pay them back.   How about giving me a loan at a great rate?"

You are lucky anyone will loan you anything, at any rate.
Work through it and rent in the meantime.

This!

Add the fact that you have enough $ for a down-payment on a new house 18 months later.  It certainly sounds like a strategic default type situation.  If I was a bank, I'd run the other way too... 

You asked for any ideas.  I wouldn't advocate this to the person you may ask, but might you consider a co-signer, or even leave your name off the mortgage if there's someone you trust?

dycker1978

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #10 on: July 15, 2016, 09:38:08 AM »
This sound to me as extremely complainy pants.  Waa I can get a good rate, they are trying to rip me off waa.

Come on you are the one that chose to file bankruptcy.  Now deal with the consequences.

Axecleaver

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #11 on: July 15, 2016, 10:29:53 AM »
What's your credit score with a bankruptcy just 18 short months ago? You said it was "good" but I'm not sure how you managed that with a recent bankruptcy.

One of the benefits of bankruptcy is that creditors know you're not allowed to do it again for seven years (In your case, five and a half more years). So they're reasonably cautious of floating you a thirty year loan that you might decide to default on in the future.
You might, however, be able to qualify for a five year loan, such as a variable rate loan with a balloon payment, which you would have no legal way to default on. Then you could refi in three or five years with better terms.

The other idea would be to pull together a higher down payment. You could get pretty good terms with 50% down using the property as collateral for the debt. Just find a cheaper place to own or come up with some more cash.

honeybbq

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #12 on: July 15, 2016, 12:41:23 PM »
wait 6 more months?

MrsDinero

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #13 on: July 15, 2016, 12:44:17 PM »
I'm calling troll.  This is OPs only post and hasn't been back since.  This thread should die. 

marty998

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #14 on: July 15, 2016, 09:39:59 PM »
I'm calling troll.  This is OPs only post and hasn't been back since.  This thread should die. 

Probably gone because he didn't get the answer he wanted. It's great that the advice on here is biased towards the "help those who help themselves" bucket of people.

radram

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #15 on: July 15, 2016, 09:53:16 PM »
I'm calling troll.  This is OPs only post and hasn't been back since.  This thread should die.

I agree.  It was the 1st and only post for the OP.

Metric Mouse

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #16 on: July 15, 2016, 09:58:09 PM »
I'm calling troll.  This is OPs only post and hasn't been back since.  This thread should die.

I agree.  It was the 1st and only post for the OP.

Still not as good as the "I panhandle with my kids on the weekend" troll...

Xphrfer

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #17 on: July 15, 2016, 10:23:32 PM »
Hi
I posted this thread to see if you guys had any ideas on this situation I'm in now.
I know the best thing to probably do is wait the 2 years and or rent ,and the video you posted (pbkmaine) is food for thought.
I have my reasons for filing and it was necessary at that time due to extenuating circumstances
I have a good credit score according to the credit agencies and enough money from the sale of my house to afford the down payment .
New laws allow for mortgage approvals after 2 years , no longer do we have to wait seven.
I posted to see if any members knew about a less costly way to get a mortgage not to troll
Thx
« Last Edit: July 15, 2016, 10:25:12 PM by Xphrfer »

former player

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #18 on: July 16, 2016, 01:52:22 AM »
Hi
I posted this thread to see if you guys had any ideas on this situation I'm in now.
I know the best thing to probably do is wait the 2 years and or rent ,and the video you posted (pbkmaine) is food for thought.
I have my reasons for filing and it was necessary at that time due to extenuating circumstances
I have a good credit score according to the credit agencies and enough money from the sale of my house to afford the down payment .
New laws allow for mortgage approvals after 2 years , no longer do we have to wait seven.
I posted to see if any members knew about a less costly way to get a mortgage not to troll
Thx
You do realise that a mortgage is debt, don't you?  I mean, a lot of people seem to think it isn't debt if its a mortgage.  Or that its "good debt".  In your case, with a recent unexplained bankruptcy, the general thought has to be "for you, no debt is good debt ever again".  Or, at least "no debt is good debt until you have paid all your creditors back".  And yes, I know that a bankruptcy is the "get out of debt free" card.  But that is legally, not morally.  If you voluntarily signed up for debt and then decided not to pay it, and now have the money to pay it, you should pay it rather than using that money as a way to get back into more debt before you have paid the last lot off.

And why on earth do you want to buy a house anyway?  See pbkmaine's link for all the reasons your thinking is disordered at a purely selfish level as well as morally bankrupt -

http://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrible-investment/

I mean, if you have money left from selling your house after going bankrupt, that means that if you hadn't owned a house at the time of your bankruptcy you would have had enough money to pay your debts and wouldn't have had to go bankrupt in the first place, wouldn't you?

Xphrfer

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #19 on: July 16, 2016, 03:16:13 PM »
Well thanks for your .02 cents "former player"
I'm not asking for anyone's moral judgement
I thought maybe someone may have a idea how to help me find a mortgage at a more reasonable rate
Otherwise I appreciate the positive advice

Cathy

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #20 on: July 16, 2016, 06:41:44 PM »
... And yes, I know that a bankruptcy is the "get out of debt free" card.  But that is legally, not morally.  If you voluntarily signed up for debt and then decided not to pay it, and now have the money to pay it, you should pay it rather than using that money as a way to get back into more debt before you have paid the last lot off. ...

This appears to be a very novel position. Are you suggesting that there is a general "moral" duty to repay consumer debt obligations that are legally unenforceable? This position seems a bit dubious, especially considering that the creditor is free to take into account the law of bankruptcy when negotiating the terms of the consumer credit contract. In other words, interest rates are set taking into account the possibility of default (including by way of bankruptcy). It would in effect be "double dipping" to say there is a moral duty to repay the loan after it becomes unenforceable, because that contingency was already taken into account by the creditor in extending the loan.

I wonder how far this alleged moral duty to pay unenforceable claims goes. If a creditor waits too long to file suit on a debt, is there a moral duty to waive any limitations defence and allow the claim to be decided on its merits? If the creditor names the wrong defendant, leading to the judgment being uncollectible, is there a moral duty to pay up anyway? (See, e.g., Earl W. Schott, Inc. v. Kalar, 20 Cal App 4th 943 (CA Ct App 1993) (judgment could not be enforced because wrong defendant was named).) Are technical arguments immoral in general?
« Last Edit: July 16, 2016, 07:30:37 PM by Cathy »

MrsDinero

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #21 on: July 16, 2016, 07:27:30 PM »
I'm calling troll.  This is OPs only post and hasn't been back since.  This thread should die.

I agree.  It was the 1st and only post for the OP.

Still not as good as the "I panhandle with my kids on the weekend" troll...

Agreed

boarder42

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #22 on: July 16, 2016, 07:39:35 PM »
... And yes, I know that a bankruptcy is the "get out of debt free" card.  But that is legally, not morally.  If you voluntarily signed up for debt and then decided not to pay it, and now have the money to pay it, you should pay it rather than using that money as a way to get back into more debt before you have paid the last lot off. ...

This appears to be a very novel position. Are you suggesting that there is a general "moral" duty to repay consumer debt obligations that are legally unenforceable? This position seems a bit dubious, especially considering that the creditor is free to take into account the law of bankruptcy when negotiating the terms of the consumer credit contract. In other words, interest rates are set taking into account the possibility of default (including by way of bankruptcy). It would in effect be "double dipping" to say there is a moral duty to repay the loan after it becomes unenforceable, because that contingency was already taken into account by the creditor in extending the loan.

I wonder how far this alleged moral duty to pay unenforceable claims goes. If a creditor waits too long to file suit on a debt, is there a moral duty to waive any limitations defence and allow the claim to be decided on its merits? If the creditor names the wrong defendant, leading to the judgment being uncollectible, is there a moral duty to pay up anyway? (See, e.g., Earl W. Schott, Inc. v. Kalar, 20 Cal App 4th 943 (CA Ct App 1993) (judgment could not be enforced because wrong defendant was named).) Are technical arguments immoral in general?

Call it whatever you want. Dude filed bankruptcy and sold his former house now wants advice on how to get a low rate loan. Fuck that. If I was in the business of lending money I wouldn't touch someone who did this for less than the prime rate plus avg credit card rate on top of it.  I wouldn't be opposed to people who have filed bankruptcy never being allowed to take out credit again.  But im sure that'll open a can of worms.

pbkmaine

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #23 on: July 16, 2016, 07:53:18 PM »
I know a number of good people who have had to file bankruptcy over medical expenses. I have a lot of sympathy for them. Our medical payment system in this country sucks.

boarder42

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #24 on: July 16, 2016, 08:03:46 PM »
I know a number of good people who have had to file bankruptcy over medical expenses. I have a lot of sympathy for them. Our medical payment system in this country sucks.

That's a different issue. And bankruptcy is a bandaid for it. Also save your damn money so that when you have a medical expense you can afford it. The medical system is one of the few systems obligated to perform a service regardless of if you have the funds to pay. Quick fix would be proof of funds or meet the consequences. Most likely death. Or make it non forgiveable debt. We have advanced medical procedures that will keep you alive now. They deserve alot of the fees they charge.

former player

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #25 on: July 17, 2016, 12:23:42 AM »
... And yes, I know that a bankruptcy is the "get out of debt free" card.  But that is legally, not morally.  If you voluntarily signed up for debt and then decided not to pay it, and now have the money to pay it, you should pay it rather than using that money as a way to get back into more debt before you have paid the last lot off. ...

This appears to be a very novel position. Are you suggesting that there is a general "moral" duty to repay consumer debt obligations that are legally unenforceable? This position seems a bit dubious, especially considering that the creditor is free to take into account the law of bankruptcy when negotiating the terms of the consumer credit contract. In other words, interest rates are set taking into account the possibility of default (including by way of bankruptcy). It would in effect be "double dipping" to say there is a moral duty to repay the loan after it becomes unenforceable, because that contingency was already taken into account by the creditor in extending the loan.

I wonder how far this alleged moral duty to pay unenforceable claims goes. If a creditor waits too long to file suit on a debt, is there a moral duty to waive any limitations defence and allow the claim to be decided on its merits? If the creditor names the wrong defendant, leading to the judgment being uncollectible, is there a moral duty to pay up anyway? (See, e.g., Earl W. Schott, Inc. v. Kalar, 20 Cal App 4th 943 (CA Ct App 1993) (judgment could not be enforced because wrong defendant was named).) Are technical arguments immoral in general?
What is legal and what is moral are two completely different things.  It can be philosophically the right thing to do something which is not legally enforceable.  (Some philosophers will argue that it can be morally right to break the law in some circumstances.)

We have no idea what circumstances led to the OP's bankruptcy.  The fact that we have no idea, but do know that he owned a house, has retained enough capital for a deposit while money he legally owed to creditors have gone unpaid and is now complaining that he would have to pay too much to start the cycle of house owning and debt all over again, in his first post on a site dedicated to prudent financial management, raised my suspicions and my hackles.

chasesfish

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #26 on: July 17, 2016, 08:40:56 AM »
You filed bankruptcy but had equity in your house?

I think you should have to wait 5-7 years before buying a new house.  You sheltered assets from creditors

boarder42

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #27 on: July 17, 2016, 08:46:01 AM »
You filed bankruptcy but had equity in your house?

I think you should have to wait 5-7 years before buying a new house.  You sheltered assets from creditors

Completely agree. Op obviously wants to take advantage of these historically low rates but in filing for bankruptcy lost that privilege. Even if I knew a loop hole I wouldn't post it. Also if that's something you're trying to do go research it. Don't make it your first post on a blah forum centered around financial responsibility. Bc I don't put filing for bankruptcy is the category of understanding finance.

snacky

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #28 on: July 17, 2016, 08:52:08 AM »
... And yes, I know that a bankruptcy is the "get out of debt free" card.  But that is legally, not morally.  If you voluntarily signed up for debt and then decided not to pay it, and now have the money to pay it, you should pay it rather than using that money as a way to get back into more debt before you have paid the last lot off. ...

This appears to be a very novel position. Are you suggesting that there is a general "moral" duty to repay consumer debt obligations that are legally unenforceable? This position seems a bit dubious, especially considering that the creditor is free to take into account the law of bankruptcy when negotiating the terms of the consumer credit contract. In other words, interest rates are set taking into account the possibility of default (including by way of bankruptcy). It would in effect be "double dipping" to say there is a moral duty to repay the loan after it becomes unenforceable, because that contingency was already taken into account by the creditor in extending the loan.

I wonder how far this alleged moral duty to pay unenforceable claims goes. If a creditor waits too long to file suit on a debt, is there a moral duty to waive any limitations defence and allow the claim to be decided on its merits? If the creditor names the wrong defendant, leading to the judgment being uncollectible, is there a moral duty to pay up anyway? (See, e.g., Earl W. Schott, Inc. v. Kalar, 20 Cal App 4th 943 (CA Ct App 1993) (judgment could not be enforced because wrong defendant was named).) Are technical arguments immoral in general?

What you are describing is similar to the concept of moral hazard. It's an interesting idea, especially when you look at the way banks behaved leading up to the big crash last decade, then their bail-out. If you can profit from your wins but don't suffer from your losses there is no reason not to take insane risks, basically.
http://www.investopedia.com/ask/answers/09/moral-hazard.asp

ender

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Re: Bankruptcy 18 months ago--- need a mortgage
« Reply #29 on: July 17, 2016, 05:53:55 PM »
... And yes, I know that a bankruptcy is the "get out of debt free" card.  But that is legally, not morally.  If you voluntarily signed up for debt and then decided not to pay it, and now have the money to pay it, you should pay it rather than using that money as a way to get back into more debt before you have paid the last lot off. ...

This appears to be a very novel position. Are you suggesting that there is a general "moral" duty to repay consumer debt obligations that are legally unenforceable? This position seems a bit dubious, especially considering that the creditor is free to take into account the law of bankruptcy when negotiating the terms of the consumer credit contract. In other words, interest rates are set taking into account the possibility of default (including by way of bankruptcy). It would in effect be "double dipping" to say there is a moral duty to repay the loan after it becomes unenforceable, because that contingency was already taken into account by the creditor in extending the loan.

Is something only moral if it is legally enforceable?