Financing in San Diego>Question Details

Brian Clancy, Home Buyer in San Diego, CA

how soon after filing bankruptcy can you qualify for a mortgage? What are the down payment requirements?

Asked by Brian Clancy, San Diego, CA Fri Jun 10, 2011

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Answers

12
2 years


J.R. Thrasher
http://www.SanDiegoRealEstateVeterans.com
(619)929-0105
1 vote Thank Flag Link Mon Aug 5, 2013
Underwriting guidelines change from time to time, but Gregorio's answer is the best given thus far. Always good to check with your lender to confirm.

Good Luck!
1 vote Thank Flag Link Sun Nov 6, 2011
Bankruptcy Guidelines:

FHA
A Chapter 7 bankruptcy (liquidation) does not disqualify a borrower from
obtaining an FHA-insured mortgage if at least two years have elapsed since
the date of the discharge of the bankruptcy. During this time, the borrower
must have
• re-established good credit, or
• chosen not to incur new credit obligations.
An elapsed period of less than two years, but not less than 12 months, may be
acceptable for an FHA-insured mortgage, if the borrower
• can show that the bankruptcy was caused by extenuating circumstances
beyond his/her control, and
• has since exhibited a documented ability to manage his/her financial affairs
in a responsible manner.
_____________________________

FHA
A Chapter 13 bankruptcy does not disqualify a borrower from obtaining an
FHA-insured mortgage, provided that the lender documents that
• one year of the pay-out period under the bankruptcy has elapsed
• the borrower’s payment performance has been satisfactory and all required
payments have been made on time, and
• the borrower has received written permission from bankruptcy court to enter
into the mortgage transaction.

TOTAL Scorecard Accept/Approve Recommendation
Lender documentation must show two years from the discharge date of a
Chapter 13 bankruptcy. If the Chapter 13 bankruptcy has not been discharged
for a minimum period of two years, the loan must be downgraded to a Refer
and evaluated by a Direct Endorsement (DE) underwriter.

___________________________

Conforming
Bankruptcy (Chapter 7 or Chapter 11)
A four-year waiting period is required, measured from the discharge or dismissal date of the
bankruptcy action.
Exceptions for Extenuating Circumstances
A two-year waiting period is permitted if extenuating circumstances can be documented, and is
measured from the discharge or dismissal date of the bankruptcy action.
___________________________________

Conforming
Bankruptcy (Chapter 13)
A distinction is made between Chapter 13 bankruptcies that were discharged and those that
were dismissed. The waiting period required for Chapter 13 bankruptcy actions is measured as
follows:
• two years from the discharge date, or
• four years from the dismissal date.
The shorter waiting period based on the discharge date recognizes that borrowers have already
met a portion of the waiting period within the time needed for the successful completion of a
Chapter 13 plan and subsequent discharge.
Web Reference: http://WeFixRates.Com
1 vote Thank Flag Link Fri Jun 10, 2011
I had a buyer that wanted to buy a home in Arizona, but he had a Chapter 7 bankruptcy 7 months ago. I introduced a loan program at http://www.cfsflex.com, they allow a mortgage after a foreclosure, short sale, or bankruptcy. There is only a six month waiting period. This is perfect for individuals looking to become homeowners again.
0 votes Thank Flag Link Sun Aug 4, 2013
1 minute later you can get 1 million dollars from any bank
Web Reference: http://Espn.com
0 votes Thank Flag Link Sat May 4, 2013
As far as what constitutes an "extenuating circumstance", typically the death/major medical impairment of a primary wage earner is the only thing underwriters will approve. Over the years I've tried many different scenarios with underwriters that could constitute an "extenuating circumstance" and this is the only scenario that will get through for sure. Anything else is very iffy as the guidelines don't clearly state what else would be acceptable and therefore puts the "saleability" of a loan in question. Lenders don't like not knowing if FHA will insure their loan and will generally not approve something they're not sure will be purchased/insured.
Web Reference: http://RobWeber.com
0 votes Thank Flag Link Tue Nov 1, 2011
You can get a FHA or conventional loans 2 years after a BK 7. You can put 3.5% down on a FHA loan. Make sure you have re-established credit and have no derogatory credit after the BK and you are good to go!
0 votes Thank Flag Link Mon Oct 31, 2011
Brian,
Before anyone decides to declare bankruptcy it advisable to ask these very question from a tax attorney who under normal conditions need to be familiar with the case and would be capable and suggest bankruptcy only as the last resort.
Their role is to clarifying how bankruptcy can be adverse to an individuals' credit or personal finance and tax obligations and how it effects and applies to their specific case .
0 votes Thank Flag Link Mon Oct 31, 2011
Gregorio, awesome, thank you.
0 votes Thank Flag Link Fri Jun 10, 2011
You must wait 2 years from the discharge date... Then you can apply for a FHA loan.
Web Reference: http://www.SLeonRealtor.com
0 votes Thank Flag Link Fri Jun 10, 2011
Hi Brian,

With FHA, you have to wait 2 years from the discharge date if it was a BK 7. An elapsed period of less than 2 years, but not less than 12 months may be acceptable for an FHA loan if you can show (to an underwriter's satisfaction) that the BK was caused by extenuating circumstances beyond your control.

If it was a BK 13, it does not have to be discharged, but you do have to show 12 consecutive payments that were made on time and you must have the BK trustee's approval.

If your credit score is 580+, you only have to put 3.5% down.

Best regards,

Elva Wormley
Cobalt Financial Corporation
(408) 615-8500 or Toll-free (866) 573-3331
0 votes Thank Flag Link Fri Jun 10, 2011
You can qualify for an FHA mortgage three years after the bankruptcy is discharged provided you can meet all the other requirements. You would need to have done some credit repair and maintained a three year history of paying your bills on time. FHA currently requires a minimum 3.5% down payment, howver, that may be subject to change.
0 votes Thank Flag Link Fri Jun 10, 2011
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