Home Buying in Long Beach>Question Details

Aera715, Other/Just Looking in Long Beach, CA

Can I purchase a home after one year after bankcrucpty discharge with 650 credit and 3.5% down?

Asked by Aera715, Long Beach, CA Fri Aug 12, 2011

My husband and I filed for Chapter 7 bankcrupcty and was discharged last Sept. We plan to use his VA certificate and he has 650 credit score. I believe mines is around there. The reason the credit score seems higher after bankcrupcty is because we kept a secured loan and just finished paying it off. We have re-established unsecured credit a little over 6 months now as well. We plan to down at least 3.5%. Would we be able to purchase a home after one year or is it the minimum of 2 years? What are our options?

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BK 7 only option is to wait the 2 years. Make sure you check the discharge date, not the file date. It's 2 yrs from the discharge date. Make sure you re-establish credit and have absolutely NO derogatory credit items after the BK. If you are VA eligible you can go zero down.
Web Reference: http://www.socalvaloans.com
0 votes Thank Flag Link Thu Nov 17, 2011
I am seeing some wrong anwers here. These are correct

According to FHA
4155.1 4.C.2.g
Chapter 7
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
• have reestablished 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.
Note: The lender must document that the borrower’s current situation
indicates that the events that led to the bankruptcy are not likely to recur.

2011 Conventional Waiting Guidelines (Fannie Mae)
Bankruptcy – You may apply for a Conventional, Fannie Mae loan after your bankruptcy has been discharged for FOUR (4) years.
Foreclosure - You may apply for a Conventional, Fannie Mae loan SEVEN (7) years after the sale date of your foreclosure. Additional qualifying requirements may apply,
Short Sale / Notice of Default – Currently treated the same as a foreclosure with a waiting time of SEVEN (7) years before you can buy again using a Fannie Mae conventional home loan.

Credit must be re-established with a minimum 660 credit score.

Fannie Mae has reduced waiting periods in cases of extenuating circumstances – The death of a primary wage earner seems to be the only one I have been able to identify up to this point.

And as for VA
2011 VA Waiting Guidelines
Bankruptcy - You may apply for a VA guaranteed loan TWO (2) years after a Bankruptcy

Foreclosure - You may apply for a VA guaranteed loan TWO (2) years after a foreclosure

Short Sale - You may apply for a VA guaranteed loan TWO (2) after a short sale, unless it was a VA loan then restrictions apply
Credit must be re-established with a minimum 620 credit score
0 votes Thank Flag Link Thu Nov 17, 2011
Bet you are confused now as these answers oppose each other.

The attached link is directly to the VA loan information booklet for lenders. On page 32 of the guide, which is page 33 in the Adobe file, you will find the bankruptcy information you are looking for. The reason for the BK is part of the VA consideration as well as your overall payment history. After 2 years, per VA, a lender may disregard the bankruptcy.

However, what VA allows and what a lender may do are only loosely connected. Lenders can, and often do, set higher limits and restrictions. That means you may need to shop for a lender to find one open to your situation.

Good luck and best wishes,
0 votes Thank Flag Link Sun Sep 4, 2011
There is no time restriction for bankruptcy. You can buy a home during and right after the discharge. Also, 650 credit score, even is low, is good enough for a VA or FHA loan, so there is a good chance to qualify for one of them. A loan officer can do that, based not only on credit score, but also income, dept ratio, etc.
Give me a call, or email me, and I'll be able to explain to you the whole process. I also be able to put you in contact with a good loan officer capable to qualify you for a loan.


Michelle Rosca
American Investor Properties, Inc.
DRE License # 01294012
835 Ohio Ave.,
Long Beach, CA 90804
Direct: 562.552.9600
0 votes Thank Flag Link Fri Aug 12, 2011
It takes two years but you have to have rebuilt your credit in the man time. That means you need to have two lines of credit on which you have paid on time for two years. This means at least two credit cards or better yet a credit card (revolving debt) and an installment account which is something like a car loan on which you will be making fixed payments for a certain amount of time.

Please see my blog on this at http://activerain.com/blogsview/2439339/buying-a-home-after-… You might also be interested in my blog on buying a home which is at http://activerain.com/blogsview/2442965/buying-a-home-the-st…

Maya Swamy
List Buy Save
0 votes Thank Flag Link Fri Aug 12, 2011
Bk have to be 2 yrs. from discharge than you can buy.
0 votes Thank Flag Link Fri Aug 12, 2011
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