This is one of those questions to which there are lots of answers, depending on who you ask. Here is an article on this subject
The basic rule of thumb is 3 years for conventional and 2 years for FHA. FHA stands for Federal Housing Administration, and they are the government backed loans. You still need to qualify for them but the down payment is only 3.5%
Conventional is basically a standard loan but typically requires 5% to 10% down.
The big issue for you is re-establishing credit. I'm going to outline what you need to do:
The first step is to make sure all of your included creditors were included in the BK on your credit report. This is going to be tedious but necessary. Believe it or not they don't all just do it. It will make the difference of an approval or not.
Once you have completed that you need to make sure there are NO negative marks on your report after the discharge date of the BK! Again, the difference between approval or not.
Next, Start establishing credit post BK. You can do this by obtaining a secured credit card or an auto loan.
The next piece of information I give will be the most valuable,
With regards to your credit card, If your credit line is $500, DO NOT SPEND MORE THAN $100 on it.
One of the scoring factors in the FICO model is your available credit. If you max out your credit - even though you make good payments - it still hurts your score. On the same token, you want to use the card to show you can handle credit responsibly. Use it for gasoline and pay it off when you get paid.
The next thing to do is refrane from letting people run your credit. Go buy the car, and get you card, but that's it. Don't apply for a bunch of credit. These inquiries stay on your record for 2 years and will also hurt your score.
BK is not the end of the world....unless you let it be. It is designed to give you a fresh start and if you do it the right way, you can have a FICO in the 7's in no time. It will take effort on your behalf to monitor and take care of your credit. It can be daunting, but it's worth it.
Here is a link to some FICO information
It will give you some more insight.
I wouldn't start trying until the discharge is at least two years old. Then find a Realtor and get with their mortgage source and get it rolling.
The big issue is going to be "what do you look like after the BK"
I hope this helps you, and I wish you all the luck!
Remax / Lakelend
You will need to put quite a bit of time between you and that bankruptcy before creditors, including mortgage companies, are willing to lend you money again. It's a long road but you have a chance at a clean start. Focus on keeping any payments you have left on time. Avoid getting any new credit and 2 - 7 years you will be eligible to purchase again if you have kept your credit record clean.
Virtual answer not to your best interest . contact mortgage broker direct for all your options
Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
Are you a veteran?
Direct line: 770-277-2341
2 year employment history
Minimum Credit Score (whatever current requirements are.. it changes, right now most likely a 640)
Time period from the bankruptcy must have passed - I believe it's two years depending upon the type of bankruptcy.
You aren't getting a loan anytime soon most likely, but talk to a lender just in case. Don't leave your fate to an online forum where anybody can answer.
Call my friends at Southeast Mortgage for more professional advise relating to obtaining a loan:
David Neimark, Sr. VP
FHA will now allow serious job loss or income reduction (20% reduction in income)to be counted as an extenuating circumstance. Buyer might be eligible to purchase a new home after a 12 month waiting period with excellent re-established credit and documentation of income loss and credit counseling.
Stay tuned! More info to come but this will certainly help get more buyers into the market in our area
According to a letter sent to mortgage lenders, the FHA said it would offer mortgage insurance to borrowers who, during the recession, filed for bankruptcy or lost their homes through a foreclosure or short-sale proceeding.
The insurance is now available to those who can prove they are no longer financially compromised â€” and met all other FHA requirements.
"FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage," the letter says.
Besides the burden of proof on the borrower to demonstrate a recovery from the "economic event," the potential homeowner must also complete housing counseling. This event would need to result in a minimum loss of 20% of the household income.
The FHA is requiring lenders to verify at least a year has passed since the foreclosure and the economic event is responsible for the loss of the home or bankruptcy.
Joel Lobb (NMLS#57916)
Senior Loan Officer
Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*
You need to keep your credit clean after the bankruptcy. Additionally, you will want to establish a line of new credit to increase your credit score.
No worries you can do it, get a Lender that has a credit repair program makes
sure they don't charge an arm and a leg to help you get back on track...
It will take you 2 to 3 years depending on the situation to be able to buy a home
again, there are programs out there depending on where you live.... It's best to work
real close with an agent & lender who will help you all the way... I hope this helps you as
I work close with my clients to get them back on there feet, some have been with me for 2 years
and we are now looking for a home thanks to the lender too.. Good Luck ..... If you ever in Vegas NV
please look me up I'll be more than happy to help you...
It would be wise to this before consulting a Realtor or Lender. What is also helpful, is that you could Google, bankruptcy court and the state your from and the website should have federal rules and regulations as well for reference.
If you would like a few lender referrals, just write me and I will be happy to assist you with that.
You won't find a lender that will accept a co-signer to offset your bankruptcy. It just is not done.
You are better off, getting your credit re-established and saving money for a reasonable down payment.
If you filed bankruptcy last year, this may be more the time for rebuilding ... unless you are purchasing with cash. Right now, TIME is the best medicine. But, no need for despair. There are 4 things you can start on right now to move the process along faster.
Review your credit report and check for any inaccuracies
Pay your bills on time
Beware of credit repair companies
Apply for credit
For a more detailed description, you can click on the link to check out the my full blog article on rebuilding your credit after foreclosure.
All the Best,
Be determined. With today's strict lender requirements the road ahead can be tough! If you have a significant downpayment and have steady income it is possible. My advice is to know your score and work on it. Also talk to your lender!
Best of luck,
reports are accurate. The next thing would be to talk to a Bank or Mortgage Broker to get a pre-approval for a loan, so you know up front how much you can afford. Hope this helps.
Best wishes to you!
Some guidelines state you can qualify with as little as 12 months elapsed since discharged discharged.
See here: http://mortgageinfopage.com/viewforum.php?f=37
You mentioned that you filed bankruptcy. Has the bankruptcy been discharged? If not, you may want withdraw from the bankruptcy proceedings if buying a home is a priority.
Also the type of bankruptcy (Chapter 13 or Chapter 7) will determine when you can obtain financing. I agree with Howard that you may want to look at lease to own options in the near term if your bankruptcy has been discharged.
Academy Residential Mortgage