new home mortgage after BK

[grassfeeder]

Somewhat unique situation.

 

I was discharged Ch 7 in 10/2012

I did NOT reaffirm my home. All payments are made on time and current.

There is a lien against the house for $22k for past due HOA's (the judgement against me was lifted during the BK, but will remain on the home).

The home is now starting to get to the point to where equity is a potential.

 

I would like to buy a new home and relocate out of state in a couple of years. I already have a renter lined up to rent my current place.

Assuming that does not fall through, and I can rent it and cover all expendatures - would I be eligible to purchase a home after the 2 years post-BK.

 

How would a lender view this?

[luckydriver]

the good news is with 2 years of rental income on your tax returns,, you can use that income to qualify for a mortgage.

 

i'm anxious to hear what the pros say about the lien. you arent responsible for it but techincally it's still in your name against that house. my gut tells me it will be an issue but i'm no atty.

[road2freedom]

Is that equity including the 22k lien? If so, watch out. They can begin foreclosure proceedings in some states. The only thing to really deter that is a lack of equity or state laws.

 

Otherwise the lien will only become an issue when you try to sell, as it will have to be satisfied at some point.

 

Like Lucky said, if you can get a couple of years of solid rental income that will help you qualify as far as debt ratios. Depending on your income and purchase price, you may or may not need help in that department. Then you just have to contend with the usual wait period.

[Brian B The Loan Professor]

welcome to the boards - I have to admit I am not sure how the bank will view this if you continue to make payments and rent it out.

Typically when this is asked people have walked away after the BK and the house becomes a foreclosure causing a minimum 3 year wait.

If you remain current on the payments you should be ok - but I cant say for sure......

[grassfeeder]

I agree, walking away would have been the easy option however in this market place - to rent an equivalent sized home would have cost me almost $1000 more a month than what the mortgage is on the current home so I decided to stay current.

 

I still currently live in the home and rent out half of it for 50% of the mortgage value. If I become eligible to purchase a new home out of state in 1.5 years, I'll rent the entire thing out.

 

I make approx $80k a year. My current mortgage is only $920/month. Outside of that, I have a car loan of $14k remaining - this should be paid down dramatically, if not all together by the time I'd look to buy again. No revolving credit to report.