The Stuff Club
TheStuffClub.com is like a credit card on training wheels.
I just applied December 29th and was approved for a Stuff Club credit line of $20,000 that report to EX & TU credit bureaus. My experiment involved taking my current 3 credit cards up to 90% of their limits and watching my scores plummet from 689 down to 619 with no other changes other than taking balances up from 27% of my available revolving credit. Now add the new stuff club card to improve the overall ratio of my outstanding credit card debt. Total available credit before the stuff club account is at $4,700 with an outstanding balance of 4,300 giving me an average credit score of 619 Stay tuned for the update when the new $20k credit line post.
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Why Rental Kharma?
You Get The Credit You Deserve! Your credit score determines if you qualify and how much you pay in interest for car loans, mortgages, credit cards and student loans. Building your credit, can lower your interest rates and save tens of thousands of dollars.
Chapter 7 vs Chapter 13 When we look at Chapter 7, you can call this “pushing the reset button” so to speak as it takes all of your debts and wipes them out and you are not liable for paying anything owed on them. When looking to file for Chapter 7, a bankruptcy trustee is going to evaluate your financial situation and income versus the debts you have in your name. If it is determined that you don’t make too much money and that your debts outweigh your income, you can proceed given that you have now passed the “Means Test.” You can include unsecured debt like credit cards, auto loans, payday loans, mortgages, or anything that isn’t a student loan as they are exempt from Chapter 7 filings.
What Is Chapter 13?
Now unlike a Chapter 7, a Chapter 13 Bankruptcy will still require you to pay a portion of your debts back to the creditors. This is why this bankruptcy filing can be described as a bankruptcy repayment plan. After Chapter 13 is filed, a Chapter 13 Bankruptcy Trustee will be assigned to you who will oversee the process and determine your repayment plans with the creditors. Normally these plans are income based and a portion of your income will be determined that can be allocated to your debts. Then on a monthly basis, the trustee will release the proper monthly funds to the creditors. These plans are typically in a length of 36-60 months or 3 to 5 years in length. After the repayment period has ended, any remaining debt owed to the creditor is written-off and you are not responsible for paying this. The key to negotiating terms with creditors is knowing that you will not be required to pay 100% of the balance.
Now if you have recently gone through a Bankruptcy, whether it be a Chapter 7 or a Chapter 13, you can be fairly certain that your credit scores will have felt the effects of this and that you will need a loan program that is beneficial to those with lower credit scores. Now depending on the time since the discharge of your bankruptcy, you will probably not be able to get a Conventional Loan as the mandatory waiting period is 4 years while for an FHA Loan the guidelines state that you need to be just 2 years after a Chapter 7 Discharge and the day after your repayment plan for Chapter 13. These are the reasons why FHA Loans are so popular for borrowers after derogatory items in their credit history. The problem for borrowers with Chapter 7 Bankruptcy is that no matter what they are required to wait the mandatory 2 years before they can apply for a mortgage again. There is no way to get around this and this waiting period will be enforced by all FHA Lenders.
Now in terms of Chapter 13 Bankruptcies, you will see different guidelines depending on the lender that you are working with. Now by the rules, FHA Guidelines state that there is not a mandatory waiting period after the repayment period of Chapter 13 is discharged. However, you will find lenders who require a 1 to 2 year mandatory waiting period. This is not an FHA Guideline but instead a Lender Overlay which we have gone over in the past. If you aren’t familiar with Lender Overlays, these are additional guidelines that lenders put on their borrowers to ensure there is less risk involved with the loan. Now if you have run into this situation, you need to contact us right away as we only work with lenders who do not have lender overlays and can do their loans per FHA Guidelines. Now getting back to the FHA Guidelines For Chapter 13 Bankruptcy it states that you can get a new mortgage during your repayment period of the Chapter 13 Bankruptcy. If you can obtain an approval from your bankruptcy trustee and you have made at least 12 payments on-time to your creditors, you can be considered for an FHA Loan. The one caveat with this is that you will need to go through a manual underwrite which means an actual underwriter will go over your entire loan file before issuing an approval for you obtain a mortgage. The other way to obtain an FHA Loan with a Chapter 13 Bankruptcy is to wait until your discharge date. The day after your discharge date, you are allowed to get a mortgage per FHA Guidelines. There is no mandatory waiting period associated with Chapter 13 and after 60 months of your repayment plan, the least you can do is get another mortgage since you have shown financial stability in sticking to your plan with the creditors.
Now that you have gone through the 2018 FHA Guidelines For Chapter 13 Bankruptcy you can see that you can obtain a mortgage during and after your Chapter 13 Bankruptcy. If you have fun into issues with getting a denial of a loan after your discharge date, you need to call and we can make sure we get your file started ASAP as we don’t have a waiting period after your Chapter 13 discharge. Listen, you have admitted you were in trouble and have made your payments, there is no reason for you not to get a loan. Reach out to us today and let us help you!
FHA Guidelines On Charge Offs And CollectionsFHA Guidelines On Charge Offs And Collections does not require borrowers to pay outstanding collections and charge off accounts to qualify for FHA Loans.
There are two sets of mortgage lending guidelines:
There are two types of FHA Guidelines On Charge Offs And Collections:
However, FHA Guidelines does classify collection accounts into three separate categories:
Can I Qualify For FHA Loan With Charge Offs?Old collection accounts who the creditor deems uncollectible are charged off on credit report.