Mortgage After Filing Bankruptcy With No Waiting Period

Bankruptcy can feel like a financial dead end but, it doesn’t have to be. If you’re wondering whether you can get a mortgage after filing bankruptcy with no waiting period to qualify again, the answer might surprise you. Thanks to non-QM mortgage loans and flexible private lending options, qualified borrowers can get a mortgage after bankruptcy with no waiting period. This guide explains how to get a mortgage after filing bankruptcy, who qualifies, what types of loans are available, and how you can buy or refinance a home sooner than you thought even right after filing.

Can You Really Get a Mortgage After Filing Bankruptcy?

Yes—some mortgage lenders allow borrowers to qualify immediately after bankruptcy through non-qualified mortgage (non-QM) loan programs. Private lenders who don’t follow traditional waiting period requirements set by Fannie Mae, Freddie Mac, FHA, VA, or USDA offer these loans. While conventional and government-backed loans may require a waiting period of 2 to 4 years, non-QM lenders can approve you immediately after your bankruptcy is filed or discharged, depending on the loan program.

Mortgage After Filing Bankruptcy With No Waiting Period

The federal government created federal bankruptcy laws for consumers who are drowning in debt.  Bankruptcy gives consumers a chance to re-structure their debts or discharged their debts and start new. Everyone has good intent on paying their bills on time and make good on their debts. However, there are extenuating circumstances where people can lose their jobs, lose their business, go through a divorce, medical issues, or other issues where it affects their finances. These extenuating circumstances affect their ability to pay their bets. Bankruptcy is a solution where consumers can get a fresh financial start.

Reasons Consumers File Bankruptcy

Once a person is behind on their monthly debts, they had to deal with bill collectors as well as relentless threatening letters from collection agencies. Dealing with one or two collection agency is fine but dealing with dozens of them can be extremely stressful. Bankruptcy is an option for those who had an economic issue during their lives. Countless of hard-working Americans filed bankruptcy after the 2008 Real Estate and Credit Meltdown. Most homebuyers who filed bankruptcy have re-established themselves.

NON-QM Loans Does Not Have Waiting Period Requirements After Bankruptcy And Housing Events

Good news is that with the introduction of NON-QM Loans. There is no waiting period in getting a mortgage after filing bankruptcy and foreclosure with NON-QM Loans and Alternative Lending Mortgage Programs. Non-QM loans are designed for borrowers that doesn’t meet standard guidelines, such as those with recent credit issues, unique income sources, or non-traditional documentation.

Features of Non-QM Loans After Bankruptcy:

• No waiting period after Chapter 7 or Chapter 13 bankruptcy
• Credit scores as low as 500 (sometimes even lower)
• Flexible income verification, including bank statements or P&L statements
• Low or no seasoning on foreclosure, deed-in-lieu, or short sale
• Available for primary residences, second homes, and investment properties
• Loan amounts up to $5M or more in some cases

Non-QM loans are ideal for self-employed borrowers, real estate investors, and individuals with recent bankruptcies or foreclosures.

Standard Waiting Period In Getting Mortgage After Filing Bankruptcy

For FHA, the waiting period after chapter 7 is 2 years from discharge and 1 year into repayment with court approval after Chapter 13. VA loans has 2 years waiting period from discharge of Chapter 7 and 1 year into repayment for Chapter 13. For USDA, waiting period is 3 years from Chapter 7 discharge and 1 year into repayment for Chapter 13. Lastly, Conventional loans has 4 years waiting period from Chapter 7 discharge and 2 years from Chapter 13 discharge. With non-QM loans, these rules don’t apply. You may qualify with no waiting period at all.

Preparing To Qualify For a Mortgage After Filing Bankruptcy By Re-Establishing Credit

After a consumer files bankruptcy, their credit scores will drop significantly.  It can drop 100 points or more. However, the drop in credit scores is temporary. It will improve as the bankruptcy on the credit report ages. There are many cases where a person files bankruptcy and the person’s credit score is over 700 one year after the bankruptcy. This holds true when the person re-establishes their credit by getting a few secured credit cards. Consumers who filed bankruptcy should immediately start re-establishing their credit after the bankruptcy discharged date.

Re-Establishing Credit After Bankruptcy

Many folks who went through a bankruptcy do not want anything to do with credit, Not getting new credit after bankruptcy will hurt them as a consumer and qualify for a mortgage. Lenders want to see established credit tradelines when they are qualifying a borrower for a home loan. NO CREDIT, NO LATE PAYMENTS is equivalent to BAD CREDIT under the eyes of lenders.

Few pointers for home buyers getting ready for mortgage after filing bankruptcy

• After filing bankruptcy, monitor credit report like monitoring bank account
• Make sure that all information is correct and are no errors or misreporting by creditors
• Check credit report every 3 months
• Consumers are entitled by law for a free copy of credit report every year from the three credit reporting giants;
  • Transunion
  • Experian
  • Equifax
• Try to request the three credit reports at different times from each individual credit bureau for 3 different times a year
• Free annual credit reports will have no credit score on them
• For a fee, credit scores can be requested

Re-Establishing Credit After Bankruptcy With Secured Credit Cards

Start to re-establish new credit after bankruptcy discharge with secured credit cards. Utility bills, insurance bills, cell phone bills, and many other vendors do not report positive payment history to credit reporting agencies but will report negative and/or delinquent balances due. Be timely with all monthly minimum payment due to whether the vendor reports it or not to the credit bureaus.

Secured credit cards are the best tools for reestablishing credit after bankruptcy and/or foreclosure.

If a person cannot afford all three at once, getting started with one secured credit card is a good approach to the road of great credit. Getting two or more secured credit cards will not just improve credit scores but will create a stronger credit profile.

Secured Credit Cards Are Easiest And Fastest Way Of Re-Establishing Credit

The key target number is 3 secured credit cards. Do not be surprised if credit score jumps more than 100 points after 3 to 5 months after you get 3 secured credit cards. Again, religiously pay monthly credit card bills on time. Remember that one late payment can drop credit scores by 50 points or more. Do not max out credit cards. Always keep them at the 20% level or less. Always keep a small balance on credit cards and not leave them at zero balance.

Importance Of Credit

Whatever purchase decision is being made, see if financing is available even though it can be paid with cash. For example, most buyers of autos purchase it with cash. However, in order to develop credit, a car buyer should explore the option if the dealer can finance 50% of the car and put a 50% down payment. If this is the route the consumer takes, check with the finance manager. Make sure the payment history of the car payment will be reported to all three credit reporting agencies.

Mortgage After Filing Bankruptcy: Guidelines On Credit Disputes

There are strict rules with regard to credit disputes during mortgage process. Here are the FHA mortgage guidelines on credit disputes during the mortgage process:

• Borrowers cannot have any credit disputes on non-medical collections with outstanding balances
• Non-Medical collections up to an aggregate outstanding unpaid balance of $1,000 is exempt from credit disputes
• Zero balance credit disputes are exempt
• No credit disputes on charge off accounts
• Medical disputes are exempt no matter how large the unpaid outstanding balance of the medical collection
• All credit disputes need to be retracted prior to the mortgage process
• Retraction of credit disputes will drop credit scores

Above is the FHA Guidelines on Credit Disputes but most mortgage loan programs follow these guidelines.

Credit Disputes Halts Mortgage Process

Here is the reason why credit disputes are not allowed. When consumers dispute derogatory tradelines from their credit report, the credit bureaus will automatically take out the negative impact of the derogatory from the credit scoring model. When consumers dispute derogatory credit tradelines such as unpaid collection accounts, the credit bureau will take out that collection account from the credit scoring formula.  Therefore, the negative impact that collection account has will be treated like it does not exist and the consumer’s credit scores will increase. The credit bureaus will post the verbiage that “consumer disputes the credit account and that the matter is under investigation.

Frequently Asked Questions (FAQs): Mortgage After Filing Bankruptcy With No Waiting Period

1. Can I really get a mortgage after filing bankruptcy?

Yes, you can get a mortgage after filing bankruptcy. Some non-QM lenders allow you to qualify for a mortgage with no waiting period, even right after filing or discharge.

2. What kind of mortgage after filing bankruptcy can I get with no waiting period?

You’ll need a non-QM loan, such as a bank statement loan, DSCR loan, or P&L-only loan, which have flexible guidelines.

3. Do I need good credit to qualify for a mortgage after filing bankruptcy?

Not necessarily. Some programs accept as low as 500 credit scores, depending on your down payment and loan type.

4. How much down payment do I need for a mortgage after filing bankruptcy?

Most non-QM loans require 10% to 30% down, depending on the lender and your credit profile.

5. Can I use bank statements instead of tax returns for a mortgage after filing bankruptcy?

Yes. Many non-QM programs allow you to qualify using bank statements for 12–24 months instead of traditional income docs.

6. Will the interest rate for a mortgage after filing bankruptcy be higher?

Yes, rates on non-QM loans are typically higher than traditional loans, but you can refinance later when you qualify.

7. Can I refinance into a conventional loan later?

Absolutely. Once your credit improves and enough time has passed, you can refinance into a lower-rate FHA or conventional loan.

8. Do I need to wait until my bankruptcy is discharged?

Not always. Some non-QM lenders may approve you right after filing or during a Chapter 13 repayment plan with court approval.

9. Are these loans available for investment properties too?

Yes. Programs like DSCR loans are designed specifically for rental or investment properties.

10. Where can I find a lender that offers mortgage after filing bankruptcy with no waiting period?

Work with specialty lenders like Gustan Cho Associates, who offer non-QM programs for borrowers with recent bankruptcies.

If you have any questions about mortgage after filing bankruptcy or about NON-QM and Alternative Lending Mortgages, please contact us at Gustan Cho Associates at 800-900-8569 or text for faster response. Or email us at alex@gustancho.com. We are available 7 days a week, evenings, weekends, and holidays.