Getting a Mortgage after Bankruptcy
Declaring bankruptcy is a significant financial turning point. Although this uncomfortable event may seem like the end of your homeownership dreams, it's important to understand that bankruptcy isn't a permanent red flag to mortgage lenders. The good news is that buying a house after bankruptcy is still a possibility.
How Long After Bankruptcy Can You Get A Mortgage?
The type of bankruptcy you pursue, the type of loan you apply for, and the unique factors surrounding your situation will impact how long it takes to be clear for a mortgage. Sometimes, you can apply for a mortgage immediately after the bankruptcy is discharged or dismissed. But in general, you can expect to wait between 2 and 4 years.
Buying A House After A Chapter 7 Bankruptcy
A Chapter 7 bankruptcy indicates the debtor is seeking to liquidate their assets and wipe away all debt. The bankrupt party emerges from the process with a fresh start.
If you file a Chapter 7 bankruptcy, you’ll usually have to wait at least 4 years from the court discharge date to qualify for a conventional home loan. However, some government-backed home loan programs offer reduced waiting periods.
Buying A House After Chapter 13 Bankruptcy
In a Chapter 13 bankruptcy, debtors seek a reorganization of their debts and commit to strict repayment plans. Debtors must make payments to creditors, but they don’t lose all their assets. Plus, they don’t take as hard of a hit to their credit because creditors reward debtors who are committed to paying their debts. After the court dismisses the Chapter 13 bankruptcy, many home buyers can apply for a home loan immediately. But the waiting period varies based on the loan type you pursue.
If you ever need some guidance, I have the experience to help you navigate the process and find the best path to homeownership. Let’s talk about how we can make it happen for you!
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