Waiting Period For Mortgage After Bankruptcy And Foreclosure

0

Waiting Period For Mortgage After Bankruptcy And Foreclosure

This BLOG On Waiting Period For Mortgage After Bankruptcy And Foreclosure Was UPDATED On September 4th, 2018

What Are The Waiting Period For Mortgage After Bankruptcy And Foreclosure:

For home buyers with a prior bankruptcy and/or foreclosure there are mandatory waiting period for mortgage after bankruptcy and foreclosure to qualify for mortgage loans. The waiting period differs depending on the loan program.

  • With a prior Chapter 7 Bankruptcy, there is a mandatory two year waiting period after the discharge date of Chapter 7 bankruptcy to qualify for VA, FHA, and USDA Loans
  • There is no waiting period to qualify for FHA and VA Loans after Chapter 13 Bankruptcy discharged date
  • Borrowers can qualify for FHA Loans and VA Home Loans one year into a Chapter 13 Bankruptcy Repayment Plan with Trustee Approval
  • There is a four year waiting period to qualify for Conventional Loans after Chapter 7 Bankruptcy discharged date
  • There is a two year waiting period after Chapter 13 Bankruptcy dismissal date to qualify for Conventional Loans
  • There is a four year waiting period to qualify for Conventional Loans after Chapter 13 Bankruptcy dismissal date
  • Lenders will not allow mortgage applicants to apply for mortgages until mandatory waiting period has passed
  • Once the mandatory waiting period has passed, then the lender will submit application and credit report to either
    • Fannie Mae’s DU Automated Underwriting System
    • and/or Freddie Mac’s LP Automated Underwriting System for an automated approval
  • If a mortgage application gets submitted prior to the end of the waiting, then the mortgage applicant will not get an automated approval per DU FINDING and/or LP FINDINGS

Waiting Period For Mortgage After Bankruptcy And Foreclosure Or Deed In Lieu Of Foreclosure

There are mandatory waiting period after housing event to qualify for government and conventional loans. There is no waiting period to qualify for home loans after foreclosure, deed in lieu of foreclosure, short sale with our Non-QM Loans.

  • There is a mandatory 3 year waiting period after the recorded date of a foreclosure or deed in lieu of foreclosure to qualify for a FHA and USDA Loans
  • There is a two year waiting period to qualify for VA Loans after foreclosure, deed in lieu of foreclosure, short sale
  • There is a seven year waiting period to qualify for Conventional Loans after regular foreclosure
  • There is a four year waiting period to qualify for Conventional Loans after short sale and/or deed in lieu of foreclosure
  • Once borrower has completed the three year mandatory waiting period after a foreclosure or a deed in lieu of foreclosure, borrowers should get an approve/eligible via either Fannie Mae’s Automated Underwriting System and/or Freddie Mac’s Automated Underwriting System on FHA and/or USDA Loans
  • Waiting period under the three year mandatory waiting period will not get an approve/eligible per DU FINDINGS and/or LP FINDINGS

There is a three year mandatory waiting period after the settlement date of the short sale to qualify for USDA and FHA insured mortgage loan. The waiting period is reduced to two years on VA Loans.

Can You Qualify For Mortgage Before The Waiting Period?

Home buyers who have not met mandatory waiting period after housing event can qualify for mortgage with our new non-qm loans.

  • There is no waiting period after foreclosure, deed in lieu of foreclosure, short sale with non-qm loans
  • Mortgage Rates are slightly higher than government and conventional loans
  • 10% to 20% down payment is required. Minimum credit scores to qualify for non-qm loans is 640 with 20% down payment
  • 10% down payment requires a 660 credit score. 680 credit score borrowers can put 10% down payment

Manual Underwrite

Borrowers who cannot get an approve/eligible per Automated Underwriting System Findings and get refer/eligible per AUS needs to be downgraded to manual underwriting on VA Home Loans and FHA Loans:

  • There is a price adjustment for a manual underwrite which means a slightly higher interest rate
  • Verification Of Rent is required on manual underwriting
  • Maximum debt to income ratio is 50% DTI with compensating factors
  • Payment Shock of less than 5% is considered compensating factor
  • Income from second job with one year seasoning but not quite two years and not used as qualified income is considered compensating factor
  • No late payments in past 12 months on all manual underwriting
  • One months reserves of PITI required

All VA and FHA Home Loans during and after Chapter 13 Bankruptcy discharge with less than 2 years seasoning of discharged date are manual underwriting. All manual underwriting guidelines apply. The Gustan Cho Team at Loan Cabin Inc. are direct lenders with no overlays on government and conventional loans. Borrowers who need to qualify for government, conventional, non-qm loans can contact us at The Gustan Cho Team at Loan Cabin Inc. at 262-716-8151 or email us at gcho@gustancho.com. We are available 7 days a week, evenings, weekends, and holidays.

Gustan Cho

www.gustancho.com

Leave A Reply

Your email address will not be published.

CALL NOW