Fixed-Interest and bankruptcy

Coming out of a bankruptcy I think you should consider a loan with more stable monthly payments. It doesn't have to be a 30 year fixed, perhaps a 5 year fixed would work. Interest only features allow you to make a smaller monthly payment but don't build any equity. If you utilize an interest only loan just to be able to qualify then you are basically leasing the home with full responsibility for repairs. You might as well rent from someone else in my opinion.

Good luck but keep on shopping around. I think you can do better. Also, ask the loan officer to explain why an FHA loan wouldn't work for your situation.

************************************************************************************

Yes, I do feel that a loan with stable payments can help Danelle as far as his financial situation is concerned. He can go for a fixed rate loan having a repayment period of 5 years as after that Danelle would like to move out.

However, the interest-only feature can be an advantage for a borrower considering the fact that the lower payments will help him keep aside extra cash for other expenses. But then, if building up equity is the priority, then it is better to leave out the interest-only option and simply go for a 5 year loan.