Conventional Loans After Chapter 13 Versus Chapter 7 Bankruptcy

What Are The Waiting Period Requirements On Conventional Versus FHA Loans On Chapter 13 Bankruptcy?

This Article Is About Guidelines On Conventional Loans After Chapter 13 Versus Chapter 7 Bankruptcy

Borrowers can qualify for a conventional loan after bankruptcy. However, Fannie Mae and Freddie Mac agency mortgage guidelines after bankruptcy are different in Chapter 13 versus Chapter 7 Bankruptcy. Chapter 7 Bankruptcy takes 90 days to get discharged after filing. Chapter 13 Bankruptcy is for consumers with a job and assets. It is a reorganization of debts. Once you file Chapter 13 Bankruptcy, the U.S. Bankruptcy Courts will appoint a bankruptcy trustee. The trustee will set up a debt repayment plan.
A percentage of your monthly income is deducted and used to pay your creditors.
Creditors will take a discounted monthly payment for the term of the bankruptcy repayment plan.
Most Chapter 13 repayment plans are for a period of 36 to 60 months. Once the consumer pays the minimum payments to their creditors, the trustee will discharge the balance of debts of all creditors.
This is when the consumer can get a fresh start and become debt-free. Chapter 7 Bankruptcy benefits for consumers who have no stable income and little to no assets. Once a consumer files Chapter 7 Bankruptcy, it normally takes 90 days to get a discharge. After Chapter 7 Bankruptcy discharge, consumers have no debt and can have a fresh start in their financial life. Homebuyers can get approved for a conventional loan after bankruptcy. The waiting period after bankruptcy differs from Chapter 13 versus Chapter 7 Bankruptcy.

Conventional Loans After Chapter 13 Versus Chapter 7 Bankruptcy: Waiting Period Requirements

What are the waiting period requirements

Mortgage borrowers can qualify for a home mortgage after bankruptcy. All federally-backed loans have mandatory waiting period requirements after bankruptcy. Every loan program has a different mortgage requirement and waiting period after bankruptcy.

Here are the mandatory waiting period requirements on conventional loans:

There is a four-year waiting period after a Chapter 7 Bankruptcy discharged date to qualify for conventional loans. There is a two-year waiting period after a Chapter 13 Bankruptcy discharged date to qualify for a conventional loan. There is a four-year waiting period after a Chapter 13 Bankruptcy dismissal date. The waiting period for borrowers who had a prior mortgage included in bankruptcy is four years from the discharged date of the bankruptcy. The date of foreclosure, deed in lieu of foreclosure, a short sale does not matter and the only thing that counts is the discharged date of the bankruptcy.
The mortgage cannot be reaffirmed. Just meeting the waiting period after bankruptcy does not automatically qualify a borrower for a mortgage. Lenders want to see re-established credit and timely payments after bankruptcy.

The Importance Of Re-Establishing Credit After Bankruptcy

Just meeting the waiting period requirements will not automatically qualify borrowers on conventional loans. Lenders want to see re-established credit after bankruptcy. Homebuyers who are planning on buying a home after bankruptcy should start working on their credit the minute their bankruptcy is discharged. Gustan Cho Associates has a one-page credit guide that will help boost credit scores to over 700 FICO in less than one year after the bankruptcy discharged date. This one-page credit guide has helped thousands of homebuyers prepare for a mortgage after bankruptcy. If you follow the directions on the credit guide, there is no reason why you should not have a credit score higher than 700 FICO after one year of your bankruptcy discharged date. Late payments after bankruptcy are deal killers.
Most lenders will not accept any borrowers with late payments after bankruptcy and/or foreclosure.
One or two late payments due to extenuating circumstances may not be complete deal killers.
You can still get an approved/eligible per automated underwriting system (AUS) with one or two late payments after bankruptcy. However, even with an approval/eligibility per AUS, most lenders will not take on a borrower with any late payments after bankruptcy. The good news is Gustan Cho Associates is a five-star national lender with no overlays on government and conventional loans licensed in multiple states.
GCA Mortgage Group will just accept the automated underwriting system findings and does not have any additional lender overlays. So, if a borrower gets an approved/eligible per automated underwriting system (AUS) with late payments after bankruptcy. Gustan Cho Associates will do the loan. We have no other lender overlays. We just go off the automated findings and have zero lender overlays.

Qualifying For Conventional Loans After Chapter 13 With A Lender With No Overlays

How to qualify for a traditional bankruptcy loan without overlays from a bankruptcy lender

Gustan Cho Associates has zero lender overlays on government and conventional loans. If you need to qualify for a mortgage after bankruptcy with a national five-star lender licensed in multiple states with no lender overlays, please contact us at GCA Mortgage Group at 262-716-8151 or text us for a faster response. Or email us at [email protected] The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays. We are experts on government and conventional loans, and also Non-QM home mortgages.

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