Foreclosure? Bankruptcy? There are home buying options for you!
Sometimes, these events can cause homeowners to lose their beloved home. A heartbreaking event like this may be discouraging, but don’t let that stop you from achieving the goal of homeownership at a later time! These life events can happen to even the most financially responsible individuals and I am here to help you out with the future options you may have.
What if you could purchase another home sooner than you thought? After bankruptcy or foreclosure, different loan programs have varied stipulations and waiting periods. As a loan officer, I am here to assist you in this process so we can see what loan options will work the best for you individually. One of the best things you can do after bankruptcy or foreclosure is to stay on top of your credit report and start rebuilding your credit. We work with expert credit repair specialists and would love to assist you in getting back on the path to homeownership.
After foreclosure, Fannie Mae and Freddie Mac loans generally require a 7-year waiting period. This waiting period may be reduced to 3 years with extenuating circumstances. These circumstances include marital separation, the loss of a job or income and illness. FHA loans require a 3-year waiting period, while VA loans require a 2-3 year waiting period after foreclosure.
The two most common types of bankruptcy for individuals are chapter 7 and chapter 13 bankruptcy. Chapter 7 bankruptcy eliminates a majority of debt, as opposed to chapter 13 which requires a creditor repayment plan. With chapter 7 bankruptcy, you will only need to wait 2 years until after your bankruptcy is dismissed or discharged to apply for an FHA or VA loan. There’s a 3 year wait period for USDA loans and at least 4 years for conventional loans with chapter 7.
Chapter 13 bankruptcy for conventional loans will vary depending on court dismissal or discharge. With court dismissal, borrowers must wait 4 years from the date of dismissal to apply for conventional loans. Discharge from the court requires 4 years from the chapter 13 filing date with 2 years from the dismissal date. USDA loans only require a 1 year and FHA or VA loans only require that the court has either discharged or dismissed the chapter 13 bankruptcy.
We hope that borrowers can always avoid bankruptcy and foreclosure, but do understand that sometimes unexpected and unfortunate events happen. If you have any questions about when you will become eligible to apply for funding after bankruptcy or foreclosure, we would love to help you! Call me today to explore the best loan options for your unique situation!