After achieving debt relief, many people want to accomplish their long-awaited goals of buying a house. However, getting a mortgage after bankruptcy can be a challenge – but not impossible. If you’d like to buy a home after going through the bankruptcy process, it’s important to understand how bankruptcy impacts your ability to get a home loan, and which mortgage programs are available to you.
How to Get a Mortgage After Bankruptcy
Getting a mortgage after bankruptcy takes a little bit of patience, plus following a few steps. One of the first steps is to improve your credit score since a bankruptcy filing might lower your credit score. Although you don’t need to wait for bankruptcy to disappear from your credit to get a mortgage, you must adhere to a waiting period before applying. The time you have to wait will depend on the type of home loan you get.
- For conventional loans, you will need to wait four years (two with extenuating circumstances) if you filed for Chapter 7 bankruptcy and two years from discharge if you filed for Chapter 13 bankruptcy.
- For FHA loans, you will need to wait two years (one year with extenuating circumstances) if you filed for Chapter 7 bankruptcy and one year if you filed for Chapter 13.
- For VA loans, you need to wait two years if you filed for Chapter 7 bankruptcy and one year if you filed for Chapter 13.
- For USDA, you need to wait three years if you filed for Chapter 7 bankruptcy and one year if you filed for Chapter 13.
- Regardless of which type of bankruptcy chapter you filed for, you do not have to wait if you are applying for a non-QM loan.
The second step to getting a mortgage after bankruptcy is to save as much as you can. Getting a mortgage will add significant pressure to your finances if not done so correctly. Putting down as much as possible in having cash reserves can offset high interest rates and increase your chances of approval.
If you need help achieving financial relief, contact our Los Angeles bankruptcy attorneys today at (800) 996-9932 to schedule a consultation!