Qualifying For Home Purchase With Prior Bankruptcy And Foreclosure

Home Purchase With Prior Bankruptcy And Foreclosure

Gustan Cho Associates

How To Qualify For Home Purchase With Prior Bankruptcy And Foreclosure:

For those folks who want to purchase a new home but had filed a prior bankruptcy, there is a mandatory waiting period of 2 years from the discharge date of the bankruptcy.  For those who have had a foreclosure, there is a mandatory waiting period of three years from the date of the sheriff’s sale or the date their name was transferred out of the deed of the home.  For those who have had a short sale, they can qualify for a conventional mortgage loan in two years if they can put 20% down payment.  For those who have had a deed in lieu of foreclosure, they can qualify for a mortgage loan in two years if they can put 20% down payment.  Putting an offer on a home before foreclosure or bankruptcy waiting period is over can be risky.

Purchase Contract On Home Purchase With Prior Bankruptcy And Foreclosure

Putting an offer on a home before foreclosure or bankruptcy waiting period is over is very common but I would strongly advise against it.  Many people who have had a prior bankruptcy and/or foreclosure often reestablish themselves quickly and are ready to purchase a home.  However, there are federal mandatory guidelines and restrictions on when they can apply for a mortgage loan.  Two years after a bankruptcy and three years after a foreclosure.

Home Purchase With Prior Bankruptcy And Foreclosure: Waiting Period

In the event if a home buyer offers to purchase a home six months before their waiting period is over, the mortgage loan process cannot officially start after the mandated waiting period is over, whether it is a bankruptcy or foreclosure.  I strongly recommend that a home buyer should consult a mortgage loan officer to see what he or she qualifies for and get their credit profile ready, but they should not officially sign a real estate purchase contract with a set closing date.

A real estate contract with a date prior to the end of the waiting period will not be honored by the mortgage lender.  A new contract need to be signed with a date after the waiting period.

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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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