February 27, 2015
A reader asks, “My question is about getting a mortgage. I have paid off my Chapter 13 BK just recently. As part of that I did short sales on 3 properties back in 2010 & 2011. My credit score is at 690 at this point and we are in good financial shape.”
“We have $90,000 in our savings account, $380,000 in liquid assets like 401K, owned property, etc. Our monthly income is over $6000, and my wife makes over $66,000 yearly. Will the government or anyone grant us a mortgage?”
In general terms, this reader’s situation sounds like he or she would not have difficulty finding a lender willing to at least consider the circumstances and review FHA home loan options.
Getting a new FHA mortgage loan after a serious financial event like a Chapter 13 bankruptcy depends on how the borrower handles financial affairs in the wake of the bankruptcy.
Building a new, reliable pattern of loan repayment and improving credit scores are both key parts in getting a lender to consider you for a new loan in these cases.
One thing the reader question implies that should be cleared up here–the FHA and/or the government are not responsible for issuing loans or credit. A participating FHA lender would handle that part of the transaction including the negotiation of interest rates, term of the loan, associated fees and expenses, etc.
The government guarantees a portion of the loan amount, making the transaction less risky for the lender. But the government won’t lend money or deal with the borrower in that way–that’s up to the lender.
Do you have questions about FHA home loans? Ask us in the comments section. All questions and comments are held for review.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
Browse by Date: