How Soon Can I Buy A Home After A Bankruptcy?
It's almost ten years since the housing bubble burst, which resulted in millions of homeowners across the country declaring bankruptcy, or being forced into foreclosure or a short sale. According to the Wall Street Journal, over the next five years, about 6 million Americans will have their bankruptcies disappear from their credit reports, enabling more homebuyers to enter the housing market.
The question many former homeowners have, who’ve been able to financially recover and can save for a down payment, is “When will I be able to buy another home?”
The most common forms of bankruptcy are Chapter 7 and Chapter 13. The type you file will affect the waiting period before you can be eligible to purchase a home.
Eligibility for an FHA or VA Home Loan after Bankruptcy
With a Chapter 7 bankruptcy, expect a 2-year wait for either FHA or VA financing, starting when the action is discharged.
Eligibility for a home loan following a Chapter 13 bankruptcy has a shorter wait period. Borrowers can be eligible for FHA and VA home loans just a year after filing a Chapter 13 bankruptcy. However, they should be prepared to prove at least 12 consecutive months of on-time payments and permission from the court to take on new debt.
Eligibility for Fannie Mae/Freddie Mac Home Loan after Bankruptcy
Borrowers can apply for a Fannie Mae/Freddie Mac home loan after a Chapter 13 bankruptcy 2 years from the discharge date and 4 years from dismissal date. For a Chapter 7 or 11 bankruptcy, borrowers must wait 4 years.
Your FICO Score and Getting a New Mortgage Loan
Notwithstanding the waiting periods, you must still establish good credit following the foreclosure, bankruptcy or short sale. That means your FICO score must meet the lender's minimal requirements to qualify for a home loan.
Learn the factors that can impact your credit score >
If you think you're in good financial shape to apply for a home loan, contact a Certainty mortgage professional in your state to discuss your options.
The question many former homeowners have, who’ve been able to financially recover and can save for a down payment, is “When will I be able to buy another home?”
The most common forms of bankruptcy are Chapter 7 and Chapter 13. The type you file will affect the waiting period before you can be eligible to purchase a home.
Eligibility for an FHA or VA Home Loan after Bankruptcy
With a Chapter 7 bankruptcy, expect a 2-year wait for either FHA or VA financing, starting when the action is discharged.
Eligibility for a home loan following a Chapter 13 bankruptcy has a shorter wait period. Borrowers can be eligible for FHA and VA home loans just a year after filing a Chapter 13 bankruptcy. However, they should be prepared to prove at least 12 consecutive months of on-time payments and permission from the court to take on new debt.
Eligibility for Fannie Mae/Freddie Mac Home Loan after Bankruptcy
Borrowers can apply for a Fannie Mae/Freddie Mac home loan after a Chapter 13 bankruptcy 2 years from the discharge date and 4 years from dismissal date. For a Chapter 7 or 11 bankruptcy, borrowers must wait 4 years.
Your FICO Score and Getting a New Mortgage Loan
Notwithstanding the waiting periods, you must still establish good credit following the foreclosure, bankruptcy or short sale. That means your FICO score must meet the lender's minimal requirements to qualify for a home loan.
Learn the factors that can impact your credit score >
If you think you're in good financial shape to apply for a home loan, contact a Certainty mortgage professional in your state to discuss your options.