Qualifying For Home Loans After Chapter 7 Bankruptcy

Qualifying For Home Loans After Chapter 7 Bankruptcy:

For those who fell victim to our country’s economic collapse and lost their jobs, chances are that they are overwhelmed with debts.  Many have lost high paying jobs and compromised with lower paying jobs with little or no benefits.  In the meantime, they are struggling with making minimum payments on high interest credit cards and other debts where they cannot get ahead and see the light at the end of the tunnel.  Maybe the best solution for those who cannot seem to get ahead is to consider filing Chapter 7 bankruptcy and have a fresh start. Borrowers can now qualify for home loans after Chapter 7 Bankruptcy as long as they meet the waiting period after bankruptcy.

Qualifying For Home Loans After Chapter 7 Bankruptcy

The minute you file Chapter 7 bankruptcy, creditors cannot contact you and demand payment on past due bills.  You need to make a list of all creditors that you want the bankruptcy court to relieve you of the debts you owe them.  You can keep your auto loan and exclude it from your bankruptcy and other credit items.  Once your bankruptcy is discharged by the bankruptcy court, all of your debts gets wiped out and you have a fresh financial start.

Credit After Bankruptcy

Once you file bankruptcy, your credit scores will plummet 200 plus points.  However, that drop is a temporary drop and your credit scores will gradually increase as your bankruptcy ages.  You should start re-establishing your credit as soon as you can after filing bankruptcy.  The easiest and fastest way to re-establish your credit after filing bankruptcy is by getting three to five secured credit cards with at least $500 balances.  Each one of those secured credit cards will boost your credit scores by a minimum of 20 or more points and your credit scores will gradually increase as time passes.  There are many cases where people’s credit scores are in the 700’s after a year of filing bankruptcy due to the use of secured credit cards.

Tips In Qualifying For Home Loans After Chapter 7 Bankruptcy

There is a minimum of a 2 year waiting period after filing bankruptcy in order to qualify for a FHA home loans after Chapter 7 bankruptcy. Just waiting out the 2 year mandatory waiting period does not guarantee a mortgage loan approval.  Lenders do not want to see any late payments after your Chapter 7 Bankruptcy. Mortgage lenders want to see the mortgage loan borrower has re-established credit.  Most lenders like to see a minimum of three credit trade lines and no late payments after filing bankruptcy.  Mortgage lenders also do not want to see any overdrafts in the borrower’s checking accounts in the past 12 months.  Mortgage lenders want to see rental verification.  It is very important that when you pay your monthly rent that you pay with a check.  Cancelled checks is how mortgage lenders document rental verification.

Mortgage Approval After Bankruptcy

If you do the above, you should have no problem qualifying for a mortgage loan after two years of your bankruptcy discharge date.

Conventional Mortgage Loan After A Bankruptcy

There is a mandatory four year waiting period to qualify for a conventional mortgage loan after a bankruptcy with re-established credit and a minimum credit score of 620 FICO.  The four year waiting period starts from the discharge date of the bankruptcy.  New Fannie Mae Guidelines for consumers who had a mortgage as part of their bankruptcy that came into effect last August 2014 is if you have a mortgage part of your bankruptcy, the waiting period start date starts from your bankruptcy discharge date and not the recorded date of your foreclosure.  That is great news for mortgage loan borrowers seeking a conventional loan or those whose foreclosures got recorded at a later date.

Related> 2015 Guidelines On Waiting Period After Bankruptcy

Related> Waiting Period After Bankruptcy And Foreclosure

Related> Approval Prior To Waiting Period After Bankruptcy

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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