Qualifying For FHA Loan After Bankruptcy

Both Chapter 7 Bankruptcy and Chapter 13 Bankruptcy gives consumers a fresh start in life either by getting their debts discharged or by re-organizing their debts into a repayment plan which they can afford and not be overwhelmed with the court’s approval.  For those who do not have little to no assets and not enough or no income can qualify for a Chapter 7 Bankruptcy which enables them to completely wipe out their debts and start their life over again with no worries of debt collectors, wage garnishments, or their bank accounts being frozen.  For consumers who have assets and have income but are just too overwhelmed with debts, they can qualify for a Chapter 13 Bankruptcy which is a debt re-organization and re-structuring program.  A percentage of the consumer’s monthly income is set aside where with those proceeds, the creditors gets paid.  With Chapter 13 Bankruptcy, the consumer enters into a 3 to 5 year repayment plan and after they complete the repayment plan, the remaining balance of their debts gets discharged and they no longer is responsible for any debts.  Home buyers can qualify for FHA after bankruptcy as long as they complete the minimum waiting period after Chapter 7 Bankruptcy and Chapter 13 Bankruptcy.

Chapter 7 Bankruptcy: FHA Loan After Bankruptcy

Home buyers can qualify for a FHA Loan After Bankruptcy if they had a Chapter 7 Bankruptcy after a two year waiting period from their bankruptcy discharge date with re-established credit and a 580 minimum credit score with a 3.5% down payment.  Mortgage lenders want to see no late payments after their Chapter 7 Bankruptcy discharge date and want to see re-established credit.

Chapter 13 Bankruptcy: FHA Loan After Bankruptcy

Home buyers can qualify for a FHA Loan After Bankruptcy if they had a Chapter 13 Bankruptcy after one year into the Chapter 13 Bankruptcy as long as they have been timely with all of their scheduled payments to their creditors and with the approval of their Chapter 13 Bankruptcy Trustee.  If the home buyer has a Chapter 13 Bankruptcy discharge, then there is no waiting period.  FHA Loan after Chapter 13 Bankruptcy mortgage loan programs are manual underwrite so you will need a FHA mortgage lender that is able to do manually underwriting.  Re-established credit is required and no late payments after the Chapter 13 Bankruptcy is required.

Re-Established Credit Required For FHA Loan After Bankruptcy

Mortgage lenders will want to see that the FHA mortgage loan borrower has re-established credit after bankruptcy and that they have been timely with all of their credit payments since the bankruptcy.  Late payments after bankruptcy can be a major issue when qualifying for a FHA Loan After Bankruptcy.  The quickest and easiest way of re-establishing your credit after bankruptcy is by getting several secured credit cards.  Secured credit cards are the same as regular unsecured credit cards except they require the consumer to put a deposit and the credit card company will issue a credit limit equivalent to the deposit.  There is a initial membership fee and annual membership fee for secured credit cards like standard unsecured credit cards.  Secured credit card companies will report your payment history to all three credit reporting agencies including late payments so never be late on any monthly payments.

Qualify For FHA Loan After Bankruptcy Now

If you had a prior bankruptcy and want to see if you can get pre-approval, contact me at 262-716-8151 or email me at gcho@gustancho.com.  You can also apply online by clicking APPLY NOW

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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