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Getting Mortgage After Foreclosure Or Bankruptcy

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Getting Mortgage After Foreclosure Or Bankruptcy

This BLOG On Getting Mortgage After Foreclosure Or Bankruptcy Was UPDATED On May 18th, 2018

Home Buyers have mandatory waiting period in getting mortgage after foreclosure or bankruptcy with government and conventional loans.

  • Gustan Cho Associates Mortgage Group has alternative non-qm loans that has no waiting period after housing event and/or bankruptcy to qualify home loans
  • NON-QM Loans have no waiting period requirements but does require 10% to 20% down payment on home purchase
  • Mortgage Rates on non-qm loans are generally 1.0% to 2.0% higher than traditional mortgages
  • However, sometimes it evens and balances out the monthly housing payments
  • This is because there are no private mortgage insurance required on non-qm loans
  • Gustan Cho Associates Mortgage Group also offers bank statement loans for self employed borrowers
  • No income tax returns are required on bank statement loans for self employed borrowers. 24 months of personal and/or business bank statement deposits are averaged and the monthly average is the monthly qualified income
  • Both NON-QM and Bank Statement Loans for self employed borrowers have no loan limits like government and conventional loans

FHA Mortgage After Foreclosure Or Bankruptcy

Bankruptcy

  • Home Buyers with prior Chapter 7 bankruptcy can qualify for a FHA Home Loans after a two year waiting period after Chapter 7 bankruptcy discharge date
  • Meeting the mandatory waiting period does not guarantee getting FHA Mortgage After Foreclosure Or Bankruptcy
  • Home Buyers can qualify as long as they have not had any late payments after bankruptcy discharge with re-established credit
  • For those who had a Chapter 13 Bankruptcy can qualify for a FHA Loans one year into the Chapter 13 Bankruptcy re-payment plan with the Chapter 13 Bankruptcy Trustee approval
  • There is no waiting period to qualify for FHA Loans after Chapter 13 Bankruptcy discharged date

Foreclosure

  • Borrowers with prior foreclosure can qualify for a FHA Loans after a three year waiting period from the recorded date of the foreclosure that is reflected on the county records

Short Sale / Deed in Lieu

  • FHA will treat a deed in lieu of foreclosure the same as a standard foreclosure
  • Three year waiting period after a deed in lieu of foreclosure will apply from the recorded date of the deed of property that is reflected on the recorder of deeds office

Minimum credit scores required to qualify for FHA Loan:  

  • Minimum down payment required for a FHA Loan is 3.5% down payment
  • To qualify for a 3.5% down payment, borrowers need a credit score of 580
  • Borrowers with credit score under 580 need a 10% down payment and an approve/eligible per Automated Underwriting System Approval
  • The lowest credit score home buyer can have to qualify for FHA Loans is 500

Sheriff’s Sale

  • There is a three year waiting period after the date of the sheriff’s sale of property to qualify for a FHA Loans

VA Mortgage Mortgage After Foreclosure Or Bankruptcy 

Bankruptcy Ch 7

  • There is a mandatory two year waiting period to qualify for a VA Loan after the discharge date of a Chapter 7 Bankruptcy
  • No late payments after the discharge date of the Chapter 7 Bankruptcy and have re-established credit is key to get an approve/eligible per AUS FINDINGS

Bankruptcy Ch 13

  • Veteran home buyers in Chapter 13 re-payment plan can qualify for a VA Loan one year into the Chapter 13 Bankruptcy
  • Need to have been timely on all payments for the past 12 months
  • Need approval of the Chapter 13 Bankruptcy Trustee
  • Consumers with a recent Chapter 13 Bankruptcy discharge, there is no waiting period after a Chapter 13 Bankruptcy discharge date to qualify for VA Home Loans

Foreclosure

  • Veteran home buyers with a foreclosure, there is a mandatory two year waiting period from the recorded date of the foreclosure to qualify for a VA Loans

Short Sale / Deed in Lieu

  • Veteran home buyers can qualify for a VA Loan after a two year waiting period after a deed in lieu of foreclosure and/or short sale

USDA Mortgage After Foreclosure Or Bankruptcy

Bankruptcy

  • There is mandatory three year waiting period to qualify for USDA Loans after Chapter 7 Bankruptcy discharged date

Foreclosure

  • The waiting period to qualify for a USDA Loan after a foreclosure is three years from the recorded date of the foreclosure

Short Sale / Deed in Lieu of Foreclosure

  • There is a three year waiting period to qualify for a USDA Loan after a short sale and/or deed in lieu of foreclosure

Conventional Mortgage After Foreclosure Or Bankruptcy

Bankruptcy

  • There is a mandatory four year waiting period after Chapter 7 bankruptcy discharged date to qualify for conventional loans
  • There is a two year mandatory waiting period to qualify for a conventional loan after a Chapter 13 Bankruptcy discharge to qualify for conventional mortgages
  • There is a four year waiting period to qualify for conventional loans after Chapter 13 dismissal date

Foreclosure

  • Borrowers with a prior foreclosure, there is a mandatory 7 year waiting period to qualify for conventional loans after the recorded date 

Short Sale / Deed in Lieu of Foreclosure

  • FANNIE MAE has updated the conventional mortgage lending guidelines on July 29, 2014 as follows:
  • If borrowers had mortgage included in bankruptcy, the recorded date of the foreclosure is waived
  • The waiting period starts from the date of the discharge date of the bankruptcy
  • Housing event can be finalized at a later date and does not matter
  • Mortgage cannot have been reaffirmed
  • No late payments after Chapter 7 Bankruptcy discharged date

NEW FANNIE MAE GUIDELINES AS OF AUGUST 16, 2014:  Effective as of August 16, 2014, New Fannie Mae Guidelines state that there is a four year waiting period after a deed in lieu of foreclosure or short sale to qualify for a conventional loan with 5% down payment.  The 2 year waiting period after a short sale or deed in lieu of foreclosure with 20% down payment is no longer in effect.

NON-QM Jumbo Mortgage Lending Guidelines

Gustan Cho Mortgage Group has two types of Jumbo Mortgage Loan Programs:

  1. Non-QM Jumbo Mortgages For Self Employed Borrowers
  2. Traditional Jumbo Loans

NON-QM Jumbo Mortgages for self employed borrowers are alternative loan programs where federal tax returns are not required.

  • We require 24 months bank statement deposits
  • The average monthly deposits is used as income
  • If borrowers provide personal bank statements, then 100% of deposits are averaged over 24 months
  • If business bank statements are used, then 50% of deposits over the past 24 months are averaged
  • Needs to be one bank account
  • No overdrafts allowed. 10% to 20% down payment required
  • There is no waiting period after bankruptcy and/or housing event to qualify for non-qm jumbo mortgages
  • There is no private mortgage insurance required on all non-qm loans and bank statement loans for self employed borrowers
  • Minimum credit scores required is 620

Traditional Jumbo Mortgage After Foreclosure Or Bankruptcy

Bankruptcy

  • Home buyers with prior bankruptcy and want to get a traditional Jumbo Mortgage Loan need to have a mandatory four year waiting period to qualify for a Jumbo Mortgage
  • There is a mandatory five year waiting period after bankruptcy to qualify for a Jumbo Mortgage with multiple bankruptcies on  credit profile

Foreclosure

  • Mandatory waiting period after a foreclosure to qualify for traditional Jumbo Mortgage Loan after the recorded date of a foreclosure is 7 years from the recorded date of the foreclosure

Short Sale / Deed in Lieu of Foreclosure

  • There is a mandatory four year waiting period to qualify for a Jumbo Mortgage after a deed in lieu of foreclosure and/or short sale

Credit and down payment for Jumbo Mortgage

  • Jumbo mortgages are higher risk loans so mortgage lenders want higher credit standards
  • Most Jumbo Mortgage Lenders want a minimum of a 700 credit score
  • There are some Jumbo Mortgage lenders like myself who can take on a Jumbo Mortgage loan applicant with a credit score of 620 with non-qm jumbo mortgages
  • Most Jumbo Mortgage lenders require a 20% down payment
  • However, I have special Jumbo Mortgage programs which only require 10% down payment but the mortgage applicant needs a 740 credit score
  • Please contact me at gcho@gustancho.com for further details or call me at 262-716-8151.

Related> Waiting period after foreclosure to qualify for mortgage

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