Waiting Period After Bankruptcy And Foreclosure
If you had a prior bankruptcy, foreclosure, deed in lieu of foreclosure, or a short sale, there is a mandatory waiting period before you can qualify for a mortgage loan. Waiting period for a bankruptcy is two years from the discharge date of the bankruptcy. Waiting periods for foreclosure, deed in lieu of foreclosure, and short sales are 3 years mandatory waiting period from the recorded date on foreclosure and deed in lieu of foreclosure and the date of the HUD on short sales. Waiting period is one year after bankruptcy, foreclosure, deed in lieu of foreclosure, and short sale if you qualify for the new HUD’s Back to Work Extenuating Circumstances FHA mortgage program as long as you can document that you had an economic event that caused your bankruptcy, foreclosure, deed in lieu of foreclosure, or short sale that was a result from being unemployed or getting an income reduction of your wages of at least 20% for six months prior and it was beyond your control.
Cannot Get Home Loan Until After Waiting Period
While you are going through the waiting period, you are not allowed to offer on a home until after the waiting period is officially over. You cannot start an official mortgage application until after you have a signed official real estate purchase contract by the seller and your mortgage loan originator has run an official mortgage credit report.
Are there things I can do during my waiting period?
If you recently went through a bankruptcy, foreclosure, deed in lieu of foreclosure, or short sale, there are plenty of things you can do while you wait out your waiting period to qualify for a residential mortgage loan. First thing you should do is to consult with a mortgage lender you would like to work with and have him create a soft file. Although a mortgage lender cannot process and underwrite your mortgage loan application, most professional mortgage lenders will have you apply for a mortgage application and run a credit report on you and create a soft file like he or she is processing your mortgage loan to see what to prepare you for and what mortgage loan program you will qualify for. Use this waiting period to make changes to your credit and financial profile. Your mortgage lender might want you to establish more credit by advising you to get secured credit cards to establish the necessary required credit tradelines required by many lenders. He will probably advise you to pay your rental payments with checks so rental verification can be verified. If you have outstanding judgments, he might want you to get a payment agreement with your judgment creditor and get a payment plan. Same goes for any outstanding tax liens. You can qualify for a mortgage loan with judgments and tax liens but need to have a payment agreement and a payment plan in force.