Financing in Berwyn>Question Details

Dawn, Home Buyer in Berwyn, IL

If I have a bankruptcy that was discharged in July of 09 when can I apply for a mortgage loan. I have owned 2 homes prior to now with no deliquencies.

Asked by Dawn, Berwyn, IL Fri Feb 19, 2010

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Rudy McDowell’s answer

For FHA, its a 2 year wait after a Chapter 7 BK. If its a 13, you may be eligible after 12 months so long as the courts allow it. For Conventional Financing (Fannie Mae) the period is 3 years after a 7 BK. I'm not familiar with any lenders that are doing no score financing. If there are, you can expect to pay a heavy premium.
My suggestion would be to restablish your credit scores and history first. Sounds like you have the time.
Start now by opening a secured credit card via your bank or other local bank/credit union. You could also be added onto someone else's card as an athorized user or co-borrower to get an even greater jump start.
There other considerations to take into account with all thes methods and a LO experienced in credit repair should be able to assist at no up front cost.
0 votes Thank Flag Link Sat Feb 20, 2010
Hi Dawn,

If it was a BK 7, you have to wait 2 years from the discharge date. If it was a BK 13, you don't have to wait, but you must have a satisfactory BK 13 payment history.

Flagstar Bank will approve a loan for a borrower whose BK 7 was less than 2 years if an "approve" or "accept" is received through the Total Scorecard system and significant extenuating circumstances exist. They will not approve the loan if it is less than one year though, regardless of the Total Scorecard response.

Best wishes,
1 vote Thank Flag Link Fri Feb 19, 2010
Elva is correct and you do not have to have re-established credit in order to buy a house. If your score is zero after the bk, you'll be using alternative credit (electric/gas/cable/car insurance payments etc). If you have a score after the bk, you're qualification will be based on the score. If it is below 620, you will have to open credit cards (secured probably) and wait until they are a year old. Prefer to get at least 3 cards. Go to credit union or bank that reports cards to all three bureaus.
0 votes Thank Flag Link Fri Feb 19, 2010

Elva is correct. The principle for obtaining a loan after a BK is 2 years unless there is extenuating circumstances. If there is you also need to make sure you do have new credit established. I hope this helps...

Steve Smither
Senior Loan Originator
Ardain Mortgage Corp.
847-942-5151 Cell
847-963-1000 Office
Web Reference:
0 votes Thank Flag Link Fri Feb 19, 2010
You have another year and 3 months to go.

Let me know if I can help.
0 votes Thank Flag Link Fri Feb 19, 2010
Two years from discharge date and you need to reestablish some good credit.
0 votes Thank Flag Link Fri Feb 19, 2010
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