This guide covers buying a house after bankruptcy discharge date. Buying a house after bankruptcy is possible. Many homebuyers think that bankruptcy is the end of the world when it comes to obtaining credit, especially a mortgage. This is not true. Many people have credit scores higher than 700 FICO less than a year before their bankruptcy discharge date.

There are mandatory waiting period requirements after bankruptcy discharge date on government and conventional loans. For example, FHA and VA loans require a two-year waiting period after the Chapter 7 Bankruptcy discharge date.

Fannie Mae and Freddie Mac require a four-year waiting period after the Chapter 7 Bankruptcy discharge date to qualify for conventional loans. Gustan Cho Associates has mortgage programs with no waiting period after bankruptcy or foreclosure with Non-QM loans. In this article, we will discuss and cover buying a house after bankruptcy discharge date.

Buying A House After Bankruptcy Discharged Date And Loan Programs

Every loan program has its mortgage agency guidelines after bankruptcy. Government and conventional loans require a mandatory waiting period after bankruptcy. There are alternative loan programs called non-QM loans that do not have a waiting period requirement after bankruptcy or foreclosure. Most lenders will require re-established credit after bankruptcy.

Lenders frown on late payments after bankruptcy. Most lenders will automatically deny mortgage applicants who had any late payments after bankruptcy.

Lenders often refer mortgage applicants with late payments after bankruptcy as second offenders and will not want them as borrowers. In this article, we will cover the waiting period requirement after the bankruptcy discharge date to qualify for a mortgage.

Buying a House After Bankruptcy: Qualifying For A Mortgage

Many potential homebuyers think it will be difficult to qualify for a mortgage after bankruptcy. This is not the case. As long as you have no late payments after your bankruptcy discharge date and have established credit, you should have no issues buying a house after bankruptcy. Homebuyers need to wait for the mandatory waiting periods to qualify for a government or conventional loan. However, Gustan Cho Associates has non-QM loans with no waiting period after bankruptcy or foreclosure. We will discuss non-QM loans in this article.

Buying A House After Bankruptcy With An FHA Loan

HUD is the parent of FHA and creates the agency mortgage guidelines for FHA loans. FHA is not a lender. It is a government agency that insures and partially guarantees lenders if borrowers default or foreclose on their FHA loan. Borrowers can qualify for an FHA loan two years after the bankruptcy discharge date. The minimum credit score required for a 3.5% down payment FHA home purchase loan is 580 FICO.

Borrowers with a FICO, a FICO, a FICO under 580, and a FICO down to 500 qualify for an FHA loan. However, per HUD Guidelines, borrowers under 580 credit scores must put a 10% versus 3.5% down payment. You cannot have any late payments after the Chapter 7 Bankruptcy discharge date.

Re-establishing your credit after bankruptcy is greatly recommended. The easiest and fastest way to re-establish your credit after bankruptcy is by getting three secured credit cards with at least a $500 credit limit. The team at Gustan Cho Associates has helped countless people get their credit scores over 700 in less than one year after their Chapter 7 Bankruptcy discharge date. FHA loans are very popular due to its lax credit and income guidelines. Over 40% of all homebuyers use FHA loans to purchase their homes. Gustan Cho Associates is a national five-star mortgage company licensed in multiple states with no lender overlays on government and conventional loans.

Buying a House After Bankruptcy With VA Loans

VA loans are the best loan program in the nation. Eligible borrowers with a certificate of eligibility (COE) can qualify for a VA home loan with no down payment and 100% financing at competitive rates. There is no mortgage insurance premium required on VA loans. There are no credit score requirements or maximum debt-to-income ratio caps on VA loans.

As long as you get approve/eligible per the automated underwriting system (AUS), you can qualify for a VA mortgage. There are no maximum loan limit caps on VA loans.

Borrowers can qualify for a VA loan two years after the Chapter 7 bankruptcy discharge date.. No late payments after the Chapter 7 bankruptcy discharge date. Lenders want to see re-established credit after bankruptcy. The easiest and fastest way of re-establishing credit after bankruptcy is by getting three $500 credit limit-secured credit cards.. The team at Gustan Cho Associates has helped countless borrowers get credit scores over 700 in less than one year after their Chapter 7 Bankruptcy discharge date.

Mortgage During And After Chapter 13 Bankruptcy

There are only two loan programs that allow homebuyers to buy a home during a Chapter 13 Bankruptcy repayment plan. FHA and VA loans allow borrowers to qualify for FHA or VA loans during the repayment period with Trustee Approval. However, borrowers must have been in the Chapter 13 repayment plan for at least 12 months to qualify.

FHA and VA have the same mortgage guidelines on qualifying for an FHA or VA  loan during Chapter 13 Bankruptcy. Borrowers need to have been timely in their repayment to the Trustee.

No late payments are allowed. Chapter 13 Bankruptcy does not have to be discharged. All loans during the Chapter 13 Bankruptcy repayment period must be manually underwritten. Manual underwriting guidelines apply. There is no waiting period after the Chapter 13 Bankruptcy discharge date to qualify for an FHA or VA loan. However, if the discharge has not been seasoned for at least two years, it must be manually underwritten.

Qualifying For Buying a House After Bankruptcy Without a Waiting Period Requirement

Gustan Cho Associates has non-QM loans with no waiting period after bankruptcy or foreclosure. Homebuyers can now qualify for a mortgage one day out of bankruptcy or foreclosure. However, non-QM loans require a 15% to 20% down payment. Mortgage rates are slightly higher than government and conventional loans.

There is no private mortgage insurance required. There is no maximum loan limit on non-QM loans. Mortgage rates depend on the longevity of the bankruptcy or foreclosure, the borrowers’ FICO, and the amount of down payment.

For more information about non-QM loans or to qualify with a national lender with no lender overlays on government and conventional loans, please get in touch with us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. The team at Gustan Cho Associates is available seven days a week, evenings, weekends, and holidays.