Need to re-establish credit and have no derogatory credit since BK 7.
If BK-13, then you can apply anytime if all of the BK payments were made on time.
You will get the same rate as someone with perfect credit.
Let me know if I can answer any follow up questions.
(214) 763-4629 cell/text/nights/weekends(Really!!)
Lending all across the entire Great State of Texas!!
â€¢ FHA requires 2-years BK discharge (only 1 year if it was due to extenuating circumstances, such as medical or death of a wage earner, etc.)
â€¢ VA requires 2-years BK discharge
â€¢ USDA requires 3-years BK discharge (only 1 year for extenuating circumstances)
â€¢ Fannie Mae & Freddie Mac require 4 years (only 2 years for extenuating circumstances)
If it was a Ch 13...
â€¢ You can be still *in* a Ch 13 BK with FHA or VA financing, it is just required 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.
â€¢ If it was a dismissed BK then 2 years from the dismissal date for FHA or VA financing
â€¢ Fannie Mae & Freddie Mac require 2 years from discharge date & 4 years from dismissal date (2 years from dismissal with extenuating circumstances)
In all situations you need at least 12 months of re-established credit and 3 traditional trade lines, some lenders want 3 trade lines of 12 months each. Trade lines that survived the BK, such as a credit card you kept open, a car loan you maintained payments on/didn't include, student loans that couldn't be included, etc. can count towards the re-established credit.
Other than medical collections that can be properly explained, if there are any late payments or delinquent accounts (collections, charge-offs, judgments, tax liens) after the BK then the time seasoning often starts over again from the latest late payment/delinquent mark (underwriter's discretion). Having a verifiable on time housing payment history goes a long way to making an underwriter feel comfortable, as well as taking a pre-purchase housing counseling class with a budgeting/financial model. Practically anything you can do to prove that you have made & kept a vow to make all payments on time will be helpful.
Shop around for a mortgage broker, they have access to many banks, private lenders and many different programs.
All the best,
Chapter 13 bankruptcy â€“ 2 years from the date of discharge, or 4 years from the date a case is dismissed (2 years in certain extenuating circumstances)
Check if you qualify for a mortgage. Try http://www.whywaitbuytoday.com
Jack Gillis, M.B.A., J.D.
Nathan Grace Real Estate
5619 Dyer Street | Suite 100
Dallas, TX 75206
You might find, however, that lenders willing to look at your file will charge more than other, high-volume lenders. The high-volume lenders cherry-pick the lowest risk files and flush the other people out of their files by refusing to deal with them. In effect the higher rate lenders who do lower volumes wind up with those people with less than sterling credit.
The short form is:
4 years for conventional, 2 years for FHA/VA - provided you have had ZERO problems after discharge (no lates, no collections, etc). You must have learned your lesson and now practice self-discipline.
The extenuating circumstances are a bit tricky. If the primary income-earner died, for example, and or had an extended hospitalization, that might unavoidable enough to be considered extenuating. Things you chose to do will not qualify for extenuating circumstances.
If you can afford to wait a bit longer (another couple of years beyond the time-frames listed), you'll get a much more favorable rate and your payments will be lower. With that said, there ARE lenders out there who will lend within the stated time-frames but you'll be paying the "sub-prime" mortgage rates that are always higher.
Also, if you can swing it, try speaking to a financial planning expert as soon as possible to help you do some proper expense planning and maybe even save more money for your downpayment.
Good luck and I hope you find a great house!
Lynn911 Dallas Realtor & Consultant, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors