If you are concerned that you will not qualify for home financing after bankruptcy, it is important to know that you have options for a home loan.
If you are concerned that you will not qualify for home financing after bankruptcy, it is important to know that you have options for a home loan.
After filing banakruptcy, you will have a waiting period before you can get certain types of home loans. These waiting periods vary. Some lenders may be willing to shorten or waive the waiting period if your bankruptcy was due to extenuating circumstances or situation that was beyond your control.
One of the most important things to keep in mind when you are planning to apply for a home financing after bankruptcy is that your bankruptcy typically needs to be discharged for you to be considered for a home loan. It is also important for you to carefully review your credit report and make certain that other issues are not still on it. By reviewing your credit report, you can make certain it doesn't contain mistakes that could prevent you from being approved for a home loan. Keep in mind that you are entitled to receive a free credit report from each of three major credit reporting agencies annually.
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Being able to demonstrate that you have clean credit following a bankruptcy is a critical component of being approved for a home mortgage. It is also important to demonstrate that you have stable employment and will be able to meet your new mortgage obligations. The requirements for qualifying for a new Federal Housing Administration (FHA) home loan after bankruptcy depend upon whether you filed for a Chapter 7 or Chapter 13 bankruptcy.
If you filed for Chapter 7, you may be required to wait a minimum of two years. Some lenders may also require that you wait an additional length of time along with that two-year waiting period. Keep in mind that the two-year waiting period begins at the time your bankruptcy was discharged; it does not begin at the time your bankruptcy was filed.
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If you filed for Chapter 13, a lender may be willing to consider your FHA loan application if you are still paying on your bankruptcy. This may be the case if you can demonstrate that you have made payments regularly for a minimum of one year. You will also need to meet the following requirements to be considered for FHA home financing after bankruptcy:
- Obtain written approval from the court trustee
- Submit a detailed explanation regarding your bankruptcy
- Have good credit
- Have a stable employment history
Obtaining home financing after bankruptcy can be a challenge, but by understanding what is involved, it is possible to overcome this situation and once again enjoy the benefits of homeownership. Reply! can help to match you with qualified lenders when the time is right.