My clients always want to know how long they can expect to wait before they can they can think about qualifying for a mortgage after bankruptcy to buy a house.
How quickly can you qualify for a mortgage after bankruptcy?
Many of them are very happy when I tell them that they can qualify faster than they think, often in as little as two years.
Why is this?
Qualifying for a mortgage depends on many things, not only whether you have filed a bankruptcy or not.
Qualifying also depends on:
- Whether you can make a big down payment
- How much income you have
- How much debt you have
- How much money you have on deposit
- Your credit history
- Whether there are any judgments against you
How does filing for bankruptcy help?
A previous bankruptcy is only one of these factors, and it often gets rid of some the factors that harm you and could stop you qualifying for a mortgage.
- A bankruptcy does this by discharging debt and removing judgments, but allowing you to keep assets like retirement accounts
So how long? I have made a helpful list to give you an idea of when the bankruptcy will stop being important for the purpose of getting a mortgage loan.
CHAPTER 7 BANKRUPTCY
- Conventional mortgage – four years from the discharge or dismissal date
- FHA mortgage – three years from the discharge or dismissal date
- VA loan – two years from the discharge or dismissal date
CHAPTER 13 BANKRUPTCY
- Conventional – two years from the discharge date, or 4 years from the dismissal date
- FHA mortgage – You must have made at least 13 of the Chapter 13 payments on time. This should take 13 months
- VA – You must have made at least 13 of the Chapter 13 payments on time. This should take 13 months
You can begin to qualify for a mortgage 2 to 3 years after the foreclosure. These years can pass at the same time as the years from the bankruptcy, so you have an incentive to do both at the same time, especially if your house is underwater.
I have represented many clients that wanted to buy a house, but had too much debt to qualify for a mortgage. I filed their cases, and then waited a few years, and then they were able to get the mortgages.
I feel a lot of satisfaction when they call my office to ask for their bankruptcy paperwork so that they can give it to the loan agent. These clients never call me back and say that the bankruptcy prevented them from getting the mortgage.
What to do next
We will sit down and have a free conference to talk about your options.