Articles Tagged With: Chapter 13 Bankruptcy

July 31, 2023

FHA Loan Applications: How Soon Is Too Soon?

It’s never too early to start planning and saving for an FHA mortgage. But if you have just discharged a bankruptcy or have entered the job market for the first time recently, you may be subject to waiting periods until you have enough time past the bankruptcy or your first job to qualify. There is a two-year rule for some FHA borrowers. These applicants must have at least two years in the job market or two years beyond the discharge date of certain bankruptcy types. And then there are the borrowers who may have met the minimum time-in-the-job-market requirements but have recently changed the nature of their employment. How many years have you worked as your own boss or a contract employee? If it’s under 24 months, you may need | more...

October 25, 2021

Can I Apply For A New Mortgage After Bankruptcy?

By Bruce Reichstein

Is a home loan in the wake of bankruptcy an impossible dream? In many cases, no, it’s not. But a potential borrower looking to start house hunting again after a Chapter 7 or Chapter 13 bankruptcy has been discharged should know about some rules that will apply in such cases. Do you know what they are? Some borrowers, including first-time home buyers, assume that after a Chapter 7 or Chapter 13 bankruptcy filing it is all but impossible to get a participating FHA lender to consider a loan application. It’s a mistake to count yourself out of the running to apply for a new home loan. Some people wrongly assume you must wait seven years or longer to apply for a new mortgage after bankruptcy. FHA home loan rules indicate | 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 17, 2018

FHA Loans After Chapter 13 Bankruptcy

By Bruce Reichstein

FHA home loans are more forgiving where a borrower’s credit is concerned; while participating lender standards are also an important part of the loan approval process, the FHA loan program rules in HUD 4000.1 allow borrowers with lower credit scores and past credit issues a chance at loan approval. This is even true in the case of Chapter 13 bankruptcy. Some assume that filing for bankruptcy means that a new home loan is quite out of reach, but FHA loan rules say otherwise. Chapter 13 bankruptcy is described by some as a “wage earner’s plan” for repayment of debts to creditors. Installment payments may be made over a period of years. This type of bankruptcy may feature a cap on the amount of debt that can be addressed under the | 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...