My main concern is to understand as much as I can before my wife and I make this decision. My concern is to understand if there is a difference during the rebuilding credit phase between each one? From a lender's perspective which would they rather see, and why? How soon after each would a lender consider an owner occupied loan and a non owner occupied loan assuming everything else is "perfect"? And if you've filed Chapter 13 in the past how much does it cost?
Pick the bankruptcy.
Perks:
- keep ur house longer (payment free i might add)
- there are lenders who will lend u money the day after it's discharged for an owner occupied single family residence.
The Bad:
- U now have a bankruptcy on ur credit that is difficult at best to get off, but not impossible.
Pick the foreclosure
Perks:
- none foreseeable to you, but the bank will have possession sooner so they can then unload their liability at an auction.
The Bad:
- U now have a foreclosure on ur credit that is extremely difficult to get off
- There are no lenders willing to lend money to buy an owner occ. single family residence the next day. You may be required to wait 2yrs before a lender will accept credit w/ a foreclosure.
- Lenders cringe when they receive a file w/ a foreclosure on the credit.
