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Waiting Period After Bankruptcy And Foreclosure Mortgage Guidelines

Gustan Cho Associates
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Waiting Period After Bankruptcy And Foreclosure Mortgage Guidelines

This BLOG On Waiting Period After Bankruptcy And Foreclosure Mortgage Guidelines Was PUBLISHED On June 23rd, 2019

Waiting Period After Bankruptcy And Foreclosure Mortgage Guidelines
Gustan Cho Associates

There is a mandatory waiting period after bankruptcy and foreclosure to qualify for a residential mortgage loan.

  • If you had a prior bankruptcy, there is a mandatory two year waiting period after the discharge date of your bankruptcy to qualify for a residential FHA mortgage loan
  • There is a three year mandatory waiting period after the recorded date of a foreclosure and/or deed in lieu of foreclosure to qualify for an FHA loan
  • There is a three year waiting period after a short sale to qualify for a residential mortgage loan
  • The waiting period time clock starts from the short sale date reflected on the HUD’s settlement statement

In this blog, we will discuss the Waiting Period After Bankruptcy And Foreclosure Mortgage Guidelines.

Can I Get Mortgage Approval Prior To My Mandatory Waiting Period After Bankruptcy And Foreclosure?

Can I Get Mortgage Approval Prior To My Mandatory Waiting Period After Bankruptcy And Foreclosure?
Gustan Cho Associates

Two to three years is a very long time to wait to qualify for a mortgage loan after a bankruptcy and/or foreclosure.

  • Many home buyers cannot get a straight answer when they ask a lender whether they can get a mortgage approval prior to their anniversary date of the waiting period after bankruptcy and foreclosure
  • This answer depends on the lender
  • Many banks and credit unions will not accept a mortgage application until the two or three year waiting period after bankruptcy and foreclosure have been passed
  • However, there are residential mortgage lenders that will accept your mortgage application prior to the two or three year waiting period after bankruptcy and foreclosure
  • However, it needs to be close to the 2 or 3 year waiting period after bankruptcy and foreclosure
  • Your mortgage loan application will be processed and underwritten and the underwriter will issue you a loan approval
  • However, YOU CANNOT CLOSE ON YOUR MORTGAGE LOAN UNTIL THE 2 OR 3 YEAR MANDATORY WAITING PERIOD AFTER BANKRUPTCY AND FORECLOSURE has passed

Or borrowers can qualify for Non-QM Loans where there are no waiting period requirements after bankruptcy and/or foreclosure.

Home Buyers Who Are Close Of Meeting Waiting Period After Bankruptcy And Foreclosure

Home Buyers Who Are Close Of Meeting Waiting Period After Bankruptcy And Foreclosure
Gustan Cho Associates

If you are reaching your two to three year mandatory waiting period after bankruptcy and foreclosure and you are a home buyer and like to start shopping for a home, consult a loan officer.

  • See if they can process and underwrite your file prior to the 2 or 3 year anniversary of your mandatory waiting period after bankruptcy and foreclosure
  • If you get the thumbs up from the mortgage broker, he or she can issue you a pre-approval letter and you can start shopping for a new home
  • Make sure that you do not set a closing date until after the 2 or 3 year mandatory waiting period
  • Once you get a signed real estate purchase contract, your lender can start processing and underwriting and get loan approval
  • Underwriters can condition that you cannot close until after the mandatory waiting period after bankruptcy and foreclosure has passed

Non-QM Mortgages

Non-QM Mortgages
Gustan Cho Associates

Non-QM Mortgages do not have any waiting period requirements after bankruptcy, foreclosure, deed in lieu of foreclosure, short sale. However, 10% to 20% down payment is required. The down payment requirements are dependent on the borrower’s credit scores. Non-QM Mortgage rates are higher than government and conventional loans. However, there is no private mortgage insurance on Non-QM Loans. There are no maximum loan limits on Non-QM Mortgages. Self-Employed Borrowers can qualify for our bank statement mortgage program for self-employed borrowers. No Income Tax Returns are required. Borrowers who had late payments in the past 12 months can qualify for Non-QM Loans. For more information on this topic and/or other mortgage-related topics, please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com.

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