topic Re: Mortgage loan after chapter 7 bankruptcy? in Bankruptcy

Mortgage loan after chapter 7 bankruptcy?

Melizuh89 — Fri, 10 Jun 2022 19:26:45 GMT

Hello, all! Filed chapter 7 in March of 2021. Discharged in July of 2021. Have been rebuilding my credit since then with my car payment, one secured card and one unsecured card. My score is in the mid-600s. I am aware that the typical waiting period for a mortgage is 2 years for fha a 4 years for conventional. However, I'm wondering if any of y'all have obtained one earlier than the 2 year mark? Have $10k saved towards down payment so far and saving more monthly. I'm now expecting, baby is due January 24th and we are majorly outgrowing our 2 bedroom rental home. I'm planning on buying at the 2 year post bankruptcy mark but just hoping there's a possibility of doing so prior to then. What's your experience on this?

Re: Mortgage loan after chapter 7 bankruptcy?

FireMedic1 — Fri, 10 Jun 2022 20:00:29 GMT

Welcome @Melizuh89

It’s important to note that the waiting period will start to run from the discharge date, not your original filing date. Mortgage lenders will reduce the waiting period if you can prove that you filed your bankruptcy because of extenuating circumstances that were beyond your control and not related to financial mismanagement. Examples of a situation like this include the death of a spouse, a natural catastrophe or a severe medical illness. Plus you'll need your mortgage scores which can be obtained from here or credit.com. Gotta hit that 650+ middle score.

Re: Mortgage loan after chapter 7 bankruptcy?

Cowboys4Life — Fri, 10 Jun 2022 20:46:53 GMT

@Melizuh89 wrote:
Hello, all! Filed chapter 7 in March of 2021. Discharged in July of 2021. Have been rebuilding my credit since then with my car payment, one secured card and one unsecured card. My score is in the mid-600s. I am aware that the typical waiting period for a mortgage is 2 years for fha a 4 years for conventional. However, I'm wondering if any of y'all have obtained one earlier than the 2 year mark? Have $10k saved towards down payment so far and saving more monthly. I'm now expecting, baby is due January 24th and we are majorly outgrowing our 2 bedroom rental home. I'm planning on buying at the 2 year post bankruptcy mark but just hoping there's a possibility of doing so prior to then. What's your experience on this?

Getting the mortgage isn't even your biggest hurdle. Depending on where you are looking for a home and the current insanity gripping the market you might be approved for a mortgage but not find a home you can afford with the interest rates at almost 6%. Another hurdle is the number of sellers holding out for cash offers and rejecting offers that are financed.

My experience with BK and a mortgage is with a VA loan which is pretty rigid on when they will consider it. I filed January 2018 and discharged May 2018. I closed on my house March 2021. My suggestion is tough it out when the baby is a newborn (they can sleep in a dresser drawer if necesary) and save as much as you can. Plus, the market may cool on prices a bit more the longer you wait.