I’ll address yoiur question about whether the bank that is holding the foreclosure will loan you the money? I think I see what you’re implying. It looks like your thinking that because the bank is in a jam, they may be quicker to loan you the money. If that is your question, then the answer is no. I get calls almost daily from buyers that think because they are in some sort of jam they need to go after a distressed property. Nothing could be further from the truth. Banks do make loans to buyers on their properties, but the two things are totally independant of each other.
I tell people very honestly that I have to make a business decision as to whether I’m going to work with them or not. After all, if I can’t make money off them, I can’t put food on the table. Personally, if you were here in Texas, as soon as one year has passed, I’d work with you because I know that with the money down and your credit score, you can buy a house, at least here in Texas.
Whether you knew it or not, Chapter 7 is by far the best way to go. Most don’t understand that when they file Chapter 13, that everytime an update is done, the clock resets and the time before the 13 is taken off the report starts anew. That basically means that 13 doesn’t come off until about 10 years after the last 13 payment is made. That can be up to 17 years from the time one filed 13.
I didn’t think it was toys that caused the BK. Although that does happen, it is not the main reason for people filing a BK. I’ve seen people file BK with credit scores over 800. Maybe its medical, maybe a divorce, maybe a loss of a job or maybe even a death. Hey it happens. Sometimes it just isn’t a choice. I had a lady call me a few years back with perfect credit. She’d never missed a payment. She wanted to short sale her home and upon completion of that, whe filed Chapter 7. Her husband left her. If one believes her story, he’d gotten mixed up with drugs, quit his job and just disappeared. She was only working part time. She had little to no income…well, I’m sure you can see at least for her, it was about the best she could do.
OK, California…Is it true. Is California really a state? LOL…Seriously, I don’t know the FHA limits in California. You’d need to speak with a loan officer to find out. Here in this area of Texas (Dallas), the FHA limits are about $273,000. I understand that would get you a good closet and a half in parts of California. My son is located in the Navy there and he’s given me some feed back as to the prices…OUCH! I think FHA has a waiting period of 2 years after a BK and 3 years after a foreclosure. Talk with a loan officer for verification. I’ve gotten people approved with a credit score of 520 here in Texas using FHA Each and every circumstance is looked at differently. With your down payment and your credit score, you really shouldn’t have much of a problem.
There are other ways than using a co-signer. Again, if you can go FHA, you will not need a co-signer. The only thing is do you need to wait 1 year or 2?
You stated that it was a business that caused your BK…Did YOU file Chapter 7 or was it your business? I think I know the answer. Again, with your strength, dollars down and credit score, you should still be able to purchase a home.
You mentioned that you have about $20,000 to put down and you’d like to have that factored into the deal, assuming that you could get a home for 60% to 70% of value. Actually, I don’t think lenders look at it quite that way. They look at a percentage of LTV or purchase price, ever which is lower. Still going FHA, this will not hurt the deal at all. I can only see it adding value.
Seller financing is always good. If the owner would carry a balloon note due in let’s say 2 years, you should be good to go. I’ve been doing this for 22 years and have only found two owners to tote the note. Granted, it is not an area that I specalize in and most sellers want their money now. I’ve even seller financed some of my own property and found it a very good way to make extra money. So don’t give up on that option. They just take a little more effort to locae. Start by looking in the newspaper.
I hope this helps, and again, my keyboard isn’t working well, so I apologize for any typing errors. I still haven’t figured out how to do a spell check on this screen…