How Can I Keep the House After the Chapter 7 Bankruptcy Discharges?

Things to Think About When Filing Bankruptcy and Getting a New Mortgage again in Kentucky.

Bankruptcy Attorney in Chicago

What happens to my house and credit after the Chapter 7 bankruptcy discharge? There are a few different answers to this question depending on the choice made during the bankruptcy. If the filer decided to reaffirm their property during the Chapter 7 bankruptcy, the filer retains the property as if the bankruptcy never happened. The payments made on the reaffirmed debt will be reported to the credit bureau helping the filer rebuild their credit.

Now, let’s discuss the other option. What happens to my house and credit if the property is not reaffirmed? First, the filer can continue to live in the house as long as the monthly mortgage payment is made. Once all the payments are made and the debt is satisfied the bank or lien holder will release the lien. The drawback is for the filer who did not reaffirm the debt and trying to rebuild their credit…

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Self-Employed with Income and Getting Approved for a Home Mortgage Loan in Kentucky?

Self-Employed with Income and Getting Approved for a Home Mortgage Loan in Kentucky?

Kentucky First Time Home Buyer Loan Programs for FHA, VA, KHC, USDA, RHS, Fannie Mae Home Mortgage Loans in Kentucky for 2018

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Self Employed Income for FHA, VA, USDA and KHC Mortgage Loans Guidelines
• A borrower is considered self employed if they have 25% or more ownership in a business.
• Contract or 1099 employees are self employed borrowers
• There are 4 types of self employed business structures
o  Sole Proprietorships
o  Corporations
o  Limited Liability Company (LLC)
o  Partnerships
Tax Returns are always required for a self employed borrower.  Depending on the business structure, the borrower may have business returns in addition to their personal tax returns.
1099, Sole Proprietorships, and LLC self employed borrowers typically file Schedule C on their personal tax returns
Corporations and Partnerships will file Business Tax Returns in addition to their personal returns.  The business returns will include K1’s listing the borrower’s ordinary business income and percentage of ownership.
Corporation and Partnerships may also have W2 income…

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Kentucky FHA HUD Homes for $100 Down

Mortgage Borrowers Get Loan Approval With Lower Credit Scores in Kentucky 

What kind of credit score do I need to qualify for different first time home buyer loans in Kentucky?

Louisville Kentucky Mortgage Loans

Recent studies suggest that home buyers with low credit scores and high debt-to-income ratios may have an easier time qualifying for financing.

Source: Mortgage Borrowers Get Loan Approval With Lower Credit

∘ What kind of credit score do I need to qualify for different first time home buyer loans in Kentucky?
Answer. Most lenders will wants a middle credit score of 620 to 640 for KY First Time Home Buyers looking to go no money down. The two most used no money down home loans in Kentucky being USDA Rural Housing and KHC with their down payment assistance will want a 620 to 640 middle score on their programs.
If you have access to 3.5% down payment, you can go FHA and secure a 30 year fixed rate mortgage with some lenders with a 580 credit score. Even though FHA on paper says they will go down to 500 credit…

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What kind of income is allowed and needed for a FHA, VA, USDA and Fannie Mae Mortgage Loan Approval in Kentucky?

What kind of income is allowed and needed for a FHA, VA, USDA and Fannie Mae Mortgage Loan Approval in Kentucky?

Kentucky First Time Home Buyer Loan Programs for FHA, VA, KHC, USDA, RHS, Fannie Mae Home Mortgage Loans in Kentucky for 2018

Income and your job history  plays a significant role when applying for a mortgage loan and getting approved for one for Kentucky Homebuyers . Mortgage Underwriters from FHA, VA, USDA and Fannie Mae  must follow both Fannie Mae  and agency guidelines when it comes to documenting and calculating qualifying income for a loan transaction. Income guidelines may vary slightly depending on the loan program and the borrower’s employment profile. Below are some general tips for W2 income.
Documentation that may be required
  • Paystub with year to date gross earnings
  • At least 1 year’s W2
  • Verbal or full VOE
Base Pay
  • Salaried and fixed hourly income is calculated by averaging the gross year to date income
  • Variable hourly income is calculated by averaging 12 month history
  • Commission and tip income is calculated by averaging over 24 months
  • No transcripts are required for salaried, hourly, or less than 25% commission W2 income borrowers
  • Unreimbursed…

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Can you get a mortgage loan while in a Chapter 13 Bankruptcy:

Here is a brief summary on getting a mortgage loan while in a Chapter 13 Bankruptcy:
You must have 12 payments paid into the Chapter 13 before you can apply for a mortgage loan.
The payments must be made on time for last 12 months or after 12 months if you have been in longer, so no late payments to the Chapter 13 while in it. 
You have to ask permission from the courts to seek a mortgage loan. They usually grants this. I have never not seen them grant it.
You have to qualify with the new house payment along with Chapter 13 payments and other debts listed on credit report. Debt to income ratios usually center around 31 and 43% respectively, meaning the new house payment should not be more than 31% of your gross monthly income and your total house payment and debts listed on credit report along with Chapter 13 payment should not be more than 43% of your total gross monthly income. 
Credit scores: Most FHA lenders I work with will want a 620 middle score. You have three fico scores from Experian, Equifax, and Transunion, and they throw out the high and low score and take middle score. For example, if you had a 598, 679, and 590 scores respectively for all three bureaus listed above, your qualifying score would be 598.
There are some FHA investors that I am set up with that will go down to 580, but I have seen in my past experiences 620 will get you a better deal and far greater chance of closing on your loan with FHA. 
Down payment: For FHA loans, you will need to have at least 3.5% down payment saved up. It is extremely hard to find a no money down loan program to get you approved for a mortgage while you are in a Chapter 13 plan. 
FHA and USDA are really the only two options that I know of that offer financing for a borrower with a current Chapter 13 Bankruptcy plan plan, so keep that in mind. 
Conventional loan program offered by Fannie Mae will not allow a mortgage loan for someone in a Chapter 13 Bankruptcy plan.
On USDA loans, it is possible to get 100% Financing after you have paid into the plan for 12 months with a good pay history. The credit scores needed for a USDA loan approval really need to be above 640 in my past experience in getting them approved. A lot of USDA lenders will say they will do down to 620, but it is very difficult getting them approved. Best to get your scores up to increase your changes in qualifying for a USDA loan. There is not much that difference in getting your scores up to that range if you are at a 620 score now. 
With USDA loans, they have income and property eligibility requirements that FHA does not have, so below is a rough run down of FHA vs USDA loan for you:

Typically, USDA-eligible properties are located in rural areas. It is a mistake, however, to think that you have to live far out in the country to qualify for a USDA loan. USDA-eligible properties are often located near urban areas.

A property’s eligibility is determined by its location with respect to USDA’s map of eligible locations. The USDA program also places limits on your household income based on median earnings in an area. If you exceed that limit, you can’t obtain a USDA loan.

The FHA, by contrast, does not place limits on household earnings. The FHA, however, does establish a maximum limit on the amount of money that can be borrowed through the program.


So if you were in a hurry to buy, after you have been in your Chapter 13 plan for 12 months, I can look at getting you approved to buy a home if you wish:
In order to get you pre-approved for your max loan amount, I will need the following items from you. This is a free process and I will give you a copy of your credit report for free!
Mortgage Pre-Approval Checklist
1.  Last 30 days worth of pay stubs
2.  Last 2 years W-2′s
3.  Last 2 years tax returns
4.  Last two months bank statements for all accounts including 401 k or retirement account  if you have one
Once I get the information above, I can usually get you pre-approved in one day, and get your loan closed in 30-45 days after you get an accepted offer on a home. 
Your first house payment usually starts 30-60 days after you close.
Your loan pre-approval is usually good for 90 days.
I don’t need originals, copies are fine. You can fax or email  me the above documents,  or meet me face-to-face if you wish to make copies and go over your options.
Let me know your questions. 
Thanks and look forward to helping you. 
Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916
American Mortgage Solutions, Inc.
10602 Timberwood Circle 
Louisville, KY 40223
Company NMLS ID #1364

Text/call:      502-905-3708

fax:            502-327-9119


If you have questions about qualifying as first time home buyer in Kentucky, please call, text, email or fill out free prequalification below for your next mortgage loan pre-approval.

Joel Lobb
Senior  Loan Officer


Text or call phone: (502) 905-3708

email me at

The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only.  The posted information does not guarantee approval, nor does it comprise full underwriting guidelines.  This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the views of my employer. Not all products or services mentioned on this site may fit all people

This web site is not the FHA, VA, USDA, HUD or any other government organization responsible for managing, insuring, regulating or issuing residential mortgage loans.

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All approvals and rates are not guaranteed, and are only issued based on standard mortgage qualifying guidelines

Remember, we are even available this weekend for pre-qualifications or questions.  Call our cell phone or email us.  If you miss us, leave a message and we WILL call you back