Articles Tagged With: Bankruptcy

July 11, 2023

FHA Loan Options Post-Bankruptcy

There is a common reader question that goes something like this: “I had a bankruptcy discharged recently. How long do I have to wait to purchase another home? I have been working on my credit and improving my scores.” Post-bankruptcy, a borrower must work hard to establish the best credit possible in order to qualify for a new home loan. Lenders may be willing to work with borrowers with credit scores starting at around 620 or higher. But credit isn’t the only factor determining how soon after bankruptcy you can apply for a home loan. The nature of a borrower’s wait time to apply after bankruptcy depends on the nature of the bankruptcy. The rules governing this are found in the FHA Single-Family Lender’s Handbook, which advises that bankruptcy “does | more...

October 14, 2021

Applying For An FHA Mortgage: Timing Counts

By Joe Wallace

If you are shopping for a new home, you want to be as informed as possible about your home loan options, rights, and responsibilities. Some begin their loan application process without being fully prepared, and this can wind up slowing down or even stopping a home loan application in its’ tracks. But how? One big mistake you should avoid making before applying for an FHA mortgage? Applying too soon. If you have financial trouble in your credit report from past issues, the date of your last late or missed payment is an important one–lenders generally want to see at least 12 months of on-time payments on your financial obligations. If you don’t have that record, it’s a good idea to wait to apply for a home loan until you do. | more...

September 24, 2021

Home Loans After Chapter 13 Bankruptcy

By Joe Wallace

Those looking for home loans in the wake of a Chapter 13 bankruptcy often get conflicting messages about when, how, and even whether they can apply. Circumstances and causes of bankruptcy may vary, but borrowers often ask the same kinds of questions about what their options are after the proceedings are done. A typical version of such questions may go like this: “I had a bankruptcy that was discharged and I was told I needed to wait two years before I can apply for an FHA loan. But other sources say I have to wait longer. What is the reality? How long do I have to wait to apply?” What follows is advice about how long you might have to wait but keep in mind that the clock starts ticking | more...

FHA Loan Waiting Times After Chapter 13 Bankruptcy

February 5, 2021

Can I Get An FHA Mortgage After Bankruptcy?

By Bruce Reichstein

People can and do apply for home loans, including FHA mortgages, following a bankruptcy filing. What does it take to be approved for an FHA home loan after filing bankruptcy? The key to loan approval in these cases? Time. You can’t simply apply for bankruptcy and six months later try to get a new home loan. FHA loan rules require a minimum time known as a “seasoning period” to be waited out. This seasoning period must pass before you are permitted to apply for a new FHA home loan. How does the seasoning period work? This part is confusing for some. We’ll review the specifics of FHA loan rules for each type of bankruptcy (Chapter 7 and Chapter 13) individually as there are unique rules for each. One consistent feature | more...

December 2, 2019

Home Loans After A Bankruptcy

By Bruce Reichstein

Are you interested in a new home loan but are worried about a past negative credit event such as a bankruptcy? Borrowers sometimes have many questions about FHA mortgages and bankruptcy. One of the most common scenarios asked about include borrowers who are about to be discharged from their bankruptcy and are contemplating a home loan. With low credit scores and a recent bankruptcy, what is a borrower to do in order to become eligible for a home loan once more? In such cases, you need to know the FHA loan rules in HUD 4000.1 which require a minimum waiting time or seasoning period before a borrower can apply for an FHA mortgage once more. The waiting time begins at the time the bankruptcy is discharged. Note that it does | more...

April 10, 2019

FHA Loans After Bankruptcy

By Joe Wallace

Yes, it is possible to get a home loan following a bankruptcy with an FHA mortgage loan. Some borrowers, including first-time home buyers, assume that after a Chapter 7 or Chapter 13 bankruptcy filing that it is impossible to get a new home loan. Others assume you must wait seven years or longer to apply for a new home loan. What’s the reality? Chapter 7 and Chapter 13 Bankruptcy The most important thing about getting a new loan after bankruptcy is when you apply, and following that the most important issues include whether or not your bankruptcy has been discharged or not. FHA home loans are possible but only after the bankruptcy has been discharged, not after they have been initially filed. The FHA Home Loan Seasoning Period After a | more...

August 16, 2018

FHA Loans And Bankruptcy: Chapter 7

By Joe Wallace

Getting an FHA home loan following a Chapter 7 bankruptcy is not impossible; borrowers who handle their finances and credit responsibly after filing bankruptcy will find FHA home loan rules are more favorable to them than it may seem. Some assume that bankruptcy means never being able to own a home again or that it may take seven to ten years to recover from such a circumstance. FHA loan rules say otherwise, and while additional lender standards may apply the borrower does not necessarily have to wait such a long time to be considered for a new home loan. FHA Loan Requirements For Applying For A Mortgage After Chapter 7 Bankruptcy FHA loan rules in HUD 4000.1 state clearly that a Chapter 7 bankruptcy is not a barrier to a | more...

August 16, 2018

Getting An FHA Mortgage After Bankruptcy

By Bruce Reichstein

Getting an FHA home loan after filing for bankruptcy is not impossible, but it’s very important to understand the rules and requirements of FHA mortgages in this area. Do you know what it takes to be approved for an FHA single family home loan after a Chapter Seven or Chapter 13 bankruptcy? FHA Home Loans Are Possible After Bankruptcy The first thing to understand about getting an FHA home loan following a bankruptcy is that two basic factors will affect your ability to be approved. These are NOT the only factors to consider, but they are the initial requirements; all other issues likely will fall behind these two areas. The first is how much time has passed since your bankruptcy was discharged. FHA home loans require a minimum amount of | more...

January 23, 2018

FHA Loans After Bankruptcy

By Joe Wallace

FHA loans after bankruptcy are possible, and there are many potential FHA loan applicants who are very curious what next steps are following a Chapter 7 or Chapter 13 bankruptcy proceeding in terms of becoming a home owner either again, or for the first time. The most important things to remember about FHA loans after a bankruptcy is that some basic issues will affect your chances for a new home loan above and beyond the rules of your Chapter 7 or Chapter 13. In addition to the guidelines you must follow depending on the type of bankruptcy you filed, FHA loan requirements, lender standards, and your own credit activity following the discharge of your bankruptcy will be crucial in determining your credit worthiness for the new mortgage. Lender standards will | more...

November 27, 2017

FHA Loan Waiting Times After Chapter 13 Bankruptcy

By Joe Wallace

We are often asked about FHA loan rules governing home loans for those with a bankruptcy on their credit reports. These types of questions vary, but often feature a common theme: “I had a bankruptcy discharged in July 2014. How long do I have to wait to purchase another home with 10% down payment with a credit score of 590?” After a bankruptcy is discharged, rebuilding good credit is one of the most crucial issues related to this question. A borrower must work hard, post-bankruptcy, to establish the best credit possible in order to qualify for a new home loan. You may find that participating FHA lenders are willing to work with borrowers with credit scores starting at around 620 or higher. That FICO score of 620 is not listed | more...