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About 1.5 years ago I had my bankruptcy discharged. Now, the lease on my house is up and I have about $7k for a down payment on a small starter house (they asking $55k)

However the 2 places I have spoken with for pre-approval wont give me the time of day after pulling my report. I really would rather not sign a new lease at the current place I live for another year.

Is there anything I can look into?

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Have you tried to find a seller who is willing to offer you financing? $7K on $55K isn't even 20% down, but if the seller is motivated and you make a decent offer, e.g. a higher rate, say 5 or 6%, and faster payback, perhaps a 10 year note, he might accept. –  JoeTaxpayer Feb 23 '13 at 15:06
The short answer is no. –  C. Ross Feb 23 '13 at 16:18
The seller already dropped their price a bit for me in hopes of selling fast, the issue I guess is the laws relating to home loans within the first 2 years of discharge. So without a much higher down payment I guess this is a losing battle? –  Hydra IO Feb 24 '13 at 4:47
It's not laws, per se; it's that bankruptcy is a 7-year kiss of death on your credit report, and the more recent your filing, the bigger the impact. It's pretty much the only thing that can push your credit score below a 400. And yes, no bank will give you the time of day, much less a 30-year loan, with something like that on your record. You are actually lucky to get a rental with a bankruptcy on your record. Yes, you have to live somewhere, but the landlord's also expecting his money, and a bankruptcy proves you've already skipped out on someone else (probably many others). –  KeithS Feb 26 '13 at 23:47

1 Answer 1

up vote 2 down vote accepted

Your only option might be finding a seller-financed property with a motivated seller who is willing to take the risk of loaning you money. However, be prepared to pay a hefty rate on that loan if you can even pull it off.

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Thank you for the straight forward answer. –  Hydra IO Feb 25 '13 at 16:31

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