This BLOG On Mortgage Guidelines In Buying Again After Bankruptcy And Foreclosure Was UPDATED And PUBLISHED On November 19th, 2020
Buying Again After Bankruptcy And Foreclosure is possible with government and conventional loans.
- However, government and conventional loans have mandatory waiting period requirements after bankruptcy and/or a housing event
- There are three different types of housing events: foreclosure, deed in lieu of foreclosure, short sale
- The waiting period requirements after bankruptcy and/or foreclosure depends on the mortgage program
- However, the housing market is booming
- The housing market is hotter now than it was prior to the coronavirus outbreak
- The COVID-19 hit the U.S. in February 2020
- Many economists and so called market experts predicted a major housing correction due to the coronavirus pandemic
- There was a market correction alright
- The housing market went the other direction
- Home prices skyrocketed
- Mortgage rates are a historic lows. 30-year fixed-rate mortgages are under 3.0% and is expected to go lower into 2021
- Home prices hit a six year high
- There are more demand for homes than inventory
- Mortgage lenders are at full capacity in purchase and refinance mortgage loan applications due to the demand of home loans due to these unbelievable low historic rates
Waiting the waiting period requirements on government and conventional loans may not be the wisest thing to do for those who want to become homeowners.
Buying Again After Bankruptcy And Foreclosure Mortgage Guidelines Versus Non-QM Mortgages One Day Out Of Bankruptcy And Foreclosure
The great news is Gustan Cho Associates offers mortgages one day out of bankruptcy and foreclosure with 30% down payment.
- There are Mortgage Guidelines In Buying Again After Bankruptcy And Foreclosure with regards to mandatory waiting periods
- Every government and conventional loans has waiting periods for borrowers buying again after bankruptcy and foreclosure
- One option homebuyers may explore is qualifying with non-QM loans
- Gustan Cho Associates offers mortgages one day out of bankruptcy and foreclosure
In this article, we will discuss and cover Buying Again After Bankruptcy And Foreclosure Mortgage Guidelines.
FHA Guidelines In Buying Again After Bankruptcy And Foreclosure
There is a two-year waiting period for borrowers to qualify for an FHA Loans after the discharged date of Chapter 7 Bankruptcy:
- Borrowers can qualify for FHA Loans one year into a Chapter 13 Bankruptcy Repayment Plan
- There is no waiting period to qualify for FHA Loans After Chapter 13 Bankruptcy discharged date
- There is a three-year waiting period for borrowers to qualify for an FHA Home Loans after the recorded date of foreclosure and/or deed in lieu of foreclosure or short sale date
- For short sales, the three-year waiting period is over from the date of the HUD settlement statement/closing of the short sale
- For a foreclosure, or deed in lieu of foreclosure, the three-year waiting period is over from the RECORDED DATE OF THE FORECLOSURE OR DEED IN LIEU OF FORECLOSURE
- Not the date that the foreclosure paperwork was signed
Lenders expect to see the borrower has rebuilt and reestablished credit after foreclosure with no late payments. Timely payments after a housing event is a must in getting qualified and approved for a mortgage.
VA Guidelines In Buying Again After Bankruptcy And Foreclosure
VA Loans are the best mortgage loan program in the U.S.
- Unfortunately, only Veteran Borrowers with an honorable discharge and a certificate of eligibility (COE) are eligible to qualify for VA Home Loans
- Most lenders have lender overlays on VA Loans
- Gustan Cho Associates is a direct lender with no overlays on VA Loans
- The Department Of Veteran Affairs (VA) has much more lenient guidelines on VA Loans than any other loan program
VA understands that Veterans deployed overseas may have more issues with paying their bills on time.
Minimum VA Eligibility Requirements And Agency Guidelines
Here are the general VA Mortgage Guidelines:
- 100% Financing with zero money down on a home purchase
- VA does not require minimum credit scores
- Gustan Cho Associates Mortgage Group has ZERO OVERLAYS on VA Loans
- VA does not have a maximum debt to income ratio requirement
- As long as the veteran borrower has an approve/eligible per Automated Underwriting System, Gustan Cho Associates will approve and fund the loan as long as the veteran borrower can meet the condition of the AUS
- VA allows up to 4% sellers concessions so no closing costs for most veteran home buyers
- The 2-year waiting period after Chapter 7 Bankruptcy discharged date to qualify for VA Loans
- 2 year waiting period after foreclosure, deed in lieu of foreclosure, short sale to qualify for VA Loans
- Outstanding collections and charge off accounts do not have to be paid and/or satisfied to qualify for VA Loans
- VA borrowers can qualify for VA Loans one year into Chapter 13 Bankruptcy Repayment Plan
There is no waiting period to qualify for VA Loans after Chapter 13 Bankruptcy Discharged Date.
When Does The Waiting Period Start In Buying Again After Bankruptcy And Foreclosure
The recorded date of the foreclosure or deed in lieu of foreclosure is the date that the actual property transfer happened and recorded in the county’s recorder of deeds office:
- Borrowers cannot apply for a mortgage application prior to these dates
- Many borrowers do because their mortgage loan originators tell them it’s alright
- Please have loan officer double check with their underwriting department to make sure they check their Guidelines And Overlays so borrowers do not have to sign mortgage documents twice and change your mortgage application date
Mortgage Application Date: Mortgage Application Date Needs To Be After Your Waiting Period Is Over
For example, say a homeowner had a deed in lieu of foreclosure on April 15, 2010, but the deed in lieu of foreclosure was recorded on February 13, 2011.
- The three-year waiting period is over on February 13, 2014
- Many home buyers are eager to purchase a home prior to the three-year waiting period so they enter into a purchase contract and schedule a closing to say 30 days from today, February 21, 2013
- The mortgage loan originator will probably not be able to get a Fannie Mae Automated Underwriting System Approval until February 1, 2013
- Mortgage Applicants can get a DU FINDINGS approve eligible at the beginning of the month since DU does not recognize the actual day
- However, mortgage application date needs to be on or after February 13, 2014, since that is the actual date of the end of the mandatory waiting period
- If mortgage application date is prior to the three-year waiting period anniversary date, your mortgage application will get kicked back
The borrower need to complete a new mortgage application packet along with the proper disclosures with the correct mortgage application date.
Loan Programs With No Waiting Period After Bankruptcy And Foreclosure
HUD launched the FHA Back to Work Extenuating Circumstances due to an economic event mortgage loan programs back in August 2013. The FHA Back To Work Program shortened the waiting period to one year waiting period after the following:
- Deed in lieu of foreclosure
- Short sale
This loan program launched by HUD turned out to be a total disaster. Only a fraction of the tens of thousands of borrowers who applied for this program made it to the closing table. 100% of the borrowers went through more stress during the FHA Back To Work Mortgage Program than any other life’s stress. To be eligible for the HUD Back To Work Mortgage Program, the mortgage loan borrower needed to be unemployed which resulted in a 20% reduction of their overall housing income for at least six months prior to the initiation of the bankruptcy, foreclosure, deed in lieu of foreclosure, or short sale
- The mortgage loan borrower was required to take a one hour HUD APPROVED housing counseling course
- The mortgage application date and the real estate purchase contract date cannot be until 30 days after the date of the HUD-approved counseling certificate
- Any mortgage application date prior to the 30-day waiting period of the HOUSING COUNSELING CERTIFICATE DATE will be denied
The mortgage application date needs to be modified which means a completely new mortgage application and disclosures needs to be completed.
No -Waiting Period After Housing Event With Non-QM Loans
Again, the FHA Back To Work is no longer in existence. However, Gustan Cho Associates has non-QM loans where there is no waiting period after a housing event. There is a one year waiting period after Chapter 7 Bankruptcy discharge date. 20% down payment is required on non-QM loans and mortgage rates are higher than traditional government and/or conventional loans. To find out more about loan programs with no waiting period after housing events or to qualify for a mortgage with a direct lender with no overlays on government and conventional loans, please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster a response. Or email us at firstname.lastname@example.org. The team of loan officers at Gustan Cho Associates are licensed in multiple states and are available 7 days a week, evenings, weekends, and holidays.