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Mortgage after banruptcy

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butter1
Valued Member

Mortgage after banruptcy

Can anyone shed light on how long after filing for chapter 7 bankruptcy will I will most likely be able to apply for a mortgage. I am eager to start the process but not sure where or when to start!

Filed 11/18/13 discharged 2/20/14 4 cc all low balances no car loan total 6500 incl student loan
Thanks in advance

Current Score: Equifax Fico Score: 595 Transunion fico Score 619 -- Goal 720
Chapter 7 BK filed November 2013 / Discharged February 2014
CapitalOne- Quicksilver - $1500 / Cap 1 Secured: $710 / Merrick Bank- $700 / Walmart $300 / Target $300 / New York & Co $550 / The Limited $250 / Buckle $250 / Fingerhut $750 / Firestone $800
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4 REPLIES 4
bstone
Frequent Contributor

Re: Mortgage after banruptcy


@butter1 wrote:
Can anyone shed light on how long after filing for chapter 7 bankruptcy will I will most likely be able to apply for a mortgage. I am eager to start the process but not sure where or when to start!

Filed 11/18/13 discharged 2/20/14 4 cc all low balances no car loan total 6500 incl student loan
Thanks in advance

Two years for an FHA, but there is a program called "Back to Work" which will allow a mortgage after one year, but I believe the guidelines are fairly stringent.

 

Good luck!

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Message 2 of 5
butter1
Valued Member

Re: Mortgage after banruptcy

Thank you I am at 1 yr now I think I can wait another year but I'll look into the back to work program! Thanks again!

Current Score: Equifax Fico Score: 595 Transunion fico Score 619 -- Goal 720
Chapter 7 BK filed November 2013 / Discharged February 2014
CapitalOne- Quicksilver - $1500 / Cap 1 Secured: $710 / Merrick Bank- $700 / Walmart $300 / Target $300 / New York & Co $550 / The Limited $250 / Buckle $250 / Fingerhut $750 / Firestone $800
Message 3 of 5
NancyLou
Established Member

Re: Mortgage after banruptcy

I just got a mortgage 8 months after discharge of a Ch. 7 and it took a huge amount of hard work on my part.

 

I got lucky in that someone I went to high school with (many years ago) is now the VP of Mortgages at a small bank who handles their own loans.  He knew my whole story and I had to include a letter explaining the Ch. 7 (due to a divorce) and I got approved for a small mortgage on the house I moved into after my divorce, only $28,000.00. In looking at the paperwork last night, it's an FHA/HUD backed loan.  All the bank required was that my middle score was above 640.

 

It can be done more quickly. I stayed on top of my credit like a madman.

 

I followed the posting thread in here, From BK7 to 700 in two years, fastidiously and bought my bureaus/scores each month.  I disputed everything as soon as it showed up as wrong on my bureaus.  I fought like a trojan to get my scores back up.  I put a lot of time, effort and money into this but I closed a week ago.  I got a 4% interest rate, too.

 

One thing that slowed me down...  I had some financial issues immediately following the divorce and was living on credit cards (Which I applied for the day after discharge at Cap One) for about two months.  This kept my balances high, which is a big no-no, but I had no choice.  I paid them in full over the two months following and my scores took a huge, huge jump.

 

My friend told me the main reason he approved the mortgage for me was because he saw the amount of work I put into cleaning up my credit after the BK7.  He was the one who noted to the loan committee that my scores went from about 500 in April to nearing 700 as of last month and he thought that should mean something.

 

It can be done under the right circumstances.  The sellers were shocked at the closing when they learned that every single person involved in this purchase, from the loan officer, to the appraiser, to the title company attorney, were people I went to school with.  They actually said at the end of the close, "We've never sold a house to anyone so well connected with the community."

 

I think what helped me the most was that I was returning to my hometown where people knew me and my reputation.  The title attorney told the sellers, "Oh, yeah.  Everyone knows Nancy.  She was one of the most popular people in high school and always well-liked and she comes from a really good family."  It pays to be from a small town.


3/4/2014 Score: EX: 576, EQ: 614, TU: 572 All from myFICO
12/12/2014 Score: EX - 629 (CreditSesame) EQ-686 (myFICO), TU - 599- 3/28/2014 (CreditKarma)
Goal Score: 700 on all three by end of 2014


Take the myFICO Fitness Challenge

Filed Ch. 13 2/18/2009, converted to Ch. 7 11/19/1013, 341 Meeting Dec. 19, 2013, discharged Mar. 13, 2014

Following the steps in the How to: BK7 to 700 in 24 months or less

Step 1 done, signed up for Score Watch.
Step 2, approved for Credit One Card ($300 limit) on 3/14/2014.
Message 4 of 5
DaveInAZ
Senior Contributor

Re: Mortgage after banruptcy

I didn't reaffirm my mortgage in my Ch7 discharged 01/31/2011 and for a couple reasons I want conventional, not FHA, so I'm stuck with wating 4 years to refi. It's been a long wait, but now only 1 1/2 months to go! Feb. 2 (a Monday) I start firing off the refi applications. My scores are 690 EQ, 702 EX & 714 TU so I'm in good shape, and the refi mortgage should be a nice boost to the scores as one of the things consistently listed as holding down the score is the lack of intallment loan history - because I didn't reaffirm there's no reporting on my CR of the last 4 years of never late mortgage payments. Smiley Mad After the mortgage refi its time to go car loan shipping, my 11 year old car w/120k miles is getting tired.

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