Many assume that after filing for a bankruptcy that you can not get a mortgage for at least 2-3 years until after it is discharged. While this is the case with most banks and mortgage companies, there are some non-prime lenders that do not have these sort of waiting periods. This means that you may be able to get a mortgage even just one day after a chapter 7 or a chapter 13 bankruptcy!
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The exact requirements to get a mortgage after a bankruptcy can vary from lender to lender. If you would like some assistance finding a lender, we can help match you with a lender.
Discover the key details about waiting periods to secure a mortgage following a bankruptcy. We delve into waiting periods for different types of loans, including conventional loans, FHA loans, VA loans, and USDA loans.
Until recently, Fannie Mae mandated a waiting period of at least 4 years post-bankruptcy discharge to be eligible for a conventional loan. Excitingly, in 2023, this waiting period has been reduced to just 2 years. Rebuilding your credit is essential, but you may now qualify for a conventional loan a mere 24 months after your bankruptcy is discharged.
FHA guidelines stipulate a 2-year waiting period following a chapter 7 bankruptcy. Some lenders may require a longer wait, but many FHA lenders approve applications after just 2 years. For a chapter 13 bankruptcy, you need to wait until you've successfully made 12 months of payments. Additionally, court trustee approval is necessary. It's worth noting that the clock starts ticking not upon filing but after the bankruptcy discharge.
USDA rules align closely with FHA guidelines. Following a chapter 7 bankruptcy, you must wait at least 2 years. In the case of a chapter 13 bankruptcy, you may become eligible after consistently making 12 months of on-time payments.
These various mortgage programs have different rules regarding waiting periods. If you've recently experienced bankruptcy, there are mortgage options available to you. If you're looking for assistance in finding the right mortgage lender, we can connect you with a lender in your area.
Get Matched with a Mortgage LenderIf you've faced foreclosure and bankruptcy in close succession, which is not uncommon, additional steps may be necessary before becoming eligible for a conventional, FHA, or USDA loan. Often, foreclosure and bankruptcy occur within a short timeframe, especially when job loss leads to foreclosure and subsequent bankruptcy. Many lenders impose a "deficiency" charge to recover losses from the foreclosed property, prompting individuals to file for chapter 7 bankruptcy to clear this deficiency.
Regardless of the reasons behind your foreclosure and bankruptcy, you still have an opportunity to purchase a home through conventional, FHA, or USDA loans. The waiting period starts either after full foreclosure or bankruptcy discharge, whichever happens later.
We understand that the journey to homeownership after bankruptcy can be complex. If you need assistance in getting answers to your questions and finding the right mortgage lender for your unique situation, we offer a free lender matching service. Feel free to reach out for a free consultation to explore your options.
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