Buying A House After Bankruptcy Discharged Date

This ARTICLE On Buying A House After Bankruptcy Discharged Date Was PUBLISHED On July 30th, 2020

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 in less than a year of their bankruptcy discharged date
  • There are mandatory waiting period requirements after bankruptcy discharged date on government and conventional loans
  • For example, FHA and VA loans require a 2 year waiting period after Chapter 7 Bankruptcy discharged date
  • Fannie Mae and Freddie Mac require a four-year waiting period after Chapter 7 Bankruptcy discharged date to qualify for conventional loans
  • Gustan Cho Associates has mortgage programs where there is no waiting period after bankruptcy and/or foreclosure with Non-QM loans

In this article, we will discuss and cover Buying A House After Bankruptcy Discharged Date.

Buying A House After Bankruptcy Discharged Date And Loan Programs

Buying A House After Bankruptcy
Gustan Cho Associates

Every loan program has its own 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 and/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 a bankruptcy as second offenders and will not want them as borrowers

In this article, we will cover the waiting period requirement after bankruptcy discharged 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 discharged 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 and/or conventional loan

However, Gustan Cho Associates has non-QM loans where there is no waiting period after bankruptcy and/or foreclosure. We will discuss non-QM loans in this article.

Buying A House After Bankruptcy With An FHA Loan

What does buying a home look like 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 in the event borrowers default and/or foreclose on their FHA loans
  • Borrowers can qualify for an FHA loan two years after bankruptcy discharged date
  • The minimum credit score required for a 3.5% down payment FHA home purchase loan is 580 FICO
  • Borrowers with under 580 credit scores and down to a 500 FICO are eligible to qualify for an FHA loan
  • However, per HUD Guidelines, borrowers with under 580 credit scores need to put a 10% versus 3.5% down payment
  • You cannot have any late payments after Chapter 7 Bankruptcy discharged 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 GCA Mortgage Group has helped countless people get their credit scores over 700 in less than one year after their Chapter 7 Bankruptcy discharged 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 and no maximum debt to income ratio caps on VA loans
  • As long as you get an approve/eligible per 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 Chapter 7 Bankruptcy discharged date
  • No late payments after Chapter 7 bankruptcy discharged 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 discharged date.

Mortgage During And After Chapter 13 Bankruptcy

What is Chapter 13 and Bankruptcy Mortgage?

There are only two loan programs that allow homebuyers a home during Chapter 13 Bankruptcy repayment plan.

  • FHA and VA loans allow borrowers to qualify for FHA and/or VA loans during the repayment period with Trustee Approval
  • However, borrowers need to have been in the Chapter 13 repayment plan for at least 12 months to qualify
  • FHA and VA have the exact same mortgage guidelines on qualifying for an FHA or VA  loan during Chapter 13 Bankruptcy
  • Borrowers need to have been timely on their repayment to the Trustee
  • No late payments are allowed. Chapter 13 Bankruptcy does not have to be discharged
  • All loans during Chapter 13 Bankruptcy repayment period need to be a manual underwrite
  • Manual underwriting guidelines apply

There is no waiting period after Chapter 13 Bankruptcy discharged date to qualify for an FHA or VA loan. However, if the discharge has not been seasoned for at least two years, it needs to be a manual underwrite.

Qualifying For A Mortgage After Bankruptcy Without A Waiting Period Requirement

Gustan Cho Associates has non-QM loans where there is no waiting period after bankruptcy and/or foreclosure. Homebuyers can now qualify for a mortgage one day out of bankruptcy and/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 and/or foreclosure, the borrowers’ credit scores, 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 contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at gcho@gustancho.com. The team at GCA Mortgage Group is available 7 days a week, evenings, weekends, and holidays.

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