VA Guidelines After Bankruptcy And Foreclosure On VA Home Loans
This Article Is About VA Guidelines After Bankruptcy And Foreclosure On VA Home Loans:
VA loans are one of three government loan programs for owner-occupant homes. VA loans are the best home mortgage loan program available today. Rates are lower than conventional loans. Eligible borrowers can qualify for a VA loan with 100% financing, no mortgage insurance, no maximum loan limit, and lenient agency mortgage requirements. There are no minimum credit score requirements or maximum debt to income ratio caps on VA loans. This holds true as long as the borrower can get an approve/eligible per automated underwriting system.
Borrowers can qualify for a VA loan two years after Chapter 7 Bankruptcy discharge. There is also a two-year waiting period after a foreclosure, deed in lieu of foreclosure, short sale to become eligible to qualify for a VA loan. Borrowers in an active Chapter 13 Bankruptcy can qualify for a VA loan one year into the Chapter 13 Bankruptcy repayment plan. Chapter 13 Bankruptcy does not have to be discharged. There is no waiting period after the Chapter 13 Bankruptcy discharged date to qualify for a VA loan. Gustan Cho Associates is one of the country’s most aggressive VA mortgage companies with no lender overlays. In this article, we will cover qualifying for a VA loan after bankruptcy and/or foreclosure at Gustan Cho Associates.
What Are The New 2021 VA Guidelines After Bankruptcy And Foreclosure
Every mortgage loan program has a mandatory waiting period after bankruptcy and foreclosure. A bankruptcy or foreclosure or both does not deter a home buyer from buying a home and becoming a homeowner again. Many folks who go through a bankruptcy and foreclosure think that they are doomed and will never be able to obtain credit.
This holds true especially to qualify for a home loan due to the massive drop in their credit scores. The big drop of the consumer’s credit scores after a bankruptcy or foreclosure is just temporary. Yes, a consumer’s credit score can plummet by more than 100 points after they file bankruptcy or have a foreclosure reported on their credit report. As the bankruptcy and foreclosure age on the consumer’s credit report, the less of an impact it will have on their credit scores.
Consumer credit scores will gradually increase over time. This still holds true even though the consumer does nothing to their credit. Homebuyers can expedite and boost their credit scores after a bankruptcy and/or foreclosure if they start re-establishing their credit. How can you re-establish credit when your credit has plummeted over 150 FICO points after a bankruptcy and foreclosure?
In this article, we will discuss and cover VA Guidelines After Bankruptcy And Foreclosure On VA Home Loans.
VA Guidelines After Bankruptcy And Foreclosure And Re-Establishing Credit
As mentioned in the earlier paragraph, credit scores will definitely plummet triple digits after a bankruptcy and/or foreclosure is reported on the credit report.
Many consumers who have a recent bankruptcy and/or foreclosure give up on getting credit. Many just want to pay cash for any and all of their purchases. They do not believe that they can re-establish their credit because of their low credit scores and the recent bankruptcy and/or foreclosure that is reporting on their credit report.
Consumers can re-establish credit right after bankruptcy and foreclosure. The easiest and fastest way of re-establishing your credit after a bankruptcy and/or foreclosure is by getting 3 to 5 secured credit cards with at least a $500 to $1,000 credit limit.
Using Secured Credit Cards To Boost And Re-Establish Credit
The higher the credit limit secured credit card consumers get, the stronger their credit profile will be.
As secured credit card ages, the stronger the credit profile will be and the higher the credit scores will be. I have seen people have 700 plus FICO credit scores one year after a Chapter 7 Bankruptcy, Foreclosure, Deed In Lieu Of Foreclosure, And Short Sale. This was done just by getting several secured credit cards and other credit.
Make sure that you keep your credit card balances low and always pay your minimum payments on time. Remember that secured credit card companies will report late payments to the three credit bureaus.
One late payment will not just plummet consumer credit scores but will remain on your credit report for a period of 7 years.
VA Guidelines After Bankruptcy And Foreclosure On Waiting Period After Chapter 7 and 13
On this blog, we will cover the mandatory waiting period after bankruptcy for FHA Loans, Conventional Loans, and VA Loans.
There is a mandatory waiting period of two years to qualify for an FHA Loan after a Chapter 7 Bankruptcy discharged date. There is a four-year mandatory waiting period to qualify for a Conventional Loan after a Chapter 7 Bankruptcy discharged date.
There is a two-year mandatory waiting period to qualify for a VA Loan after a Chapter 7 Bankruptcy discharged date.
The waiting period is 3 years after Chapter 7 discharged date to qualify for USDA Home Loans.
Borrowers can qualify for VA Loans one year into their Chapter 7 Bankruptcy Repayment Plans. There is also no waiting period after Chapter 7 Bankruptcy discharged date at Gustan Cho Associates Mortgage Group. It needs to be a manual underwrite. Over 30% of our borrowers are folks either in a Chapter 13 Bankruptcy Repayment Plan and/or recent Chapter 13 discharge who need to qualify for VA and/or FHA Loans.
How Does Bankruptcy And Housing Event Affect Mortgage Rates
Having a prior Chapter 7 Bankruptcy will not affect your mortgage interest rates on your VA Loan.
The only thing that will affect your mortgage interest rates on your VA Loan is your credit scores. VA Loans does not require any down payment so no matter whether you put zero down payment or 20% down payment, your VA mortgage interest rates will be the same. The reason why the loan to value does not impact VA mortgage interest rates is that VA Loans are insured by the United States Department of Veteran Affairs.
The Department of Veterans Affairs is just like FHA Loans is insured by the Federal Housing Administration.
Conventional Loans are not insured. Borrowers who put less than 20% down payment will need to get private mortgage insurance from a private mortgage insurance provider.
With Conventional Loans, the more down payment a homebuyer puts down on their home purchase, the less the mortgage interest rates are.
VA Guidelines After Bankruptcy And Foreclosure On Waiting Period After Foreclosure
VA Loans only have a two year mandatory waiting period after foreclosure, deed in lieu of foreclosure, or short sale for a Veteran to qualify for a VA Loan.
- FHA Loans require a three year waiting period for a home buyer to qualify for an FHA Loan after a foreclosure, deed in lieu of foreclosure, or short sale
- Fannie Mae and Freddie Mac have a 7 year mandatory waiting period for borrowers to qualify for a Conventional Loan
- Fannie Mae and Freddie Mac require a four year mandatory waiting period for a borrower to qualify for a Conventional mortgage after a deed in lieu of foreclosure and/or short sale.
If you are a Veteran and would like to see if you qualify for a VA Loan, contact us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at [email protected] Gustan Cho Associates has non-QM loans one day out of bankruptcy and/or foreclosure for borrowers with no waiting period requirements. However, a 30% down payment is required. The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays to take your phone calls and answer any questions you may have on VA Loans.