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Chapter 7. Is a new mortgage loan possible two years after discharge?

homeloanexpert
Established Contributor

Re: Chapter 7. Is a new mortgage loan possible two years after discharge?

@Grim4051

Yes

Branch Manager - Specializing in FHA, VA, USDA, Conventional, Jumbo, Portfolio and Non-QM Loan Products.
Message 11 of 16
olivifos
New Visitor

Re: Chapter 7. Is a new mortgage loan possible two years after discharge?

Thank you, it's interested. I've thought it's impossible after two years

Message 12 of 16
Deafening_Silence86
New Contributor

Re: Chapter 7. Is a new mortgage loan possible two years after discharge?

Extenuating circumstances is a hard sell most of the time. It can be done, but you would need to show catastrophic loss of income or an insurmountable amount of bills that forced the issue. Generally speaking we're talking someone got diagnosed with a serious illness and racked up hundreds of thousands of dollars in medical bills. The other situation would be the main breadwinner loses their job for multiple years in a row forcing a catastrophic set of circumstances.

 

You could theoretically get a conventional loan through FHLMC as they do not have waiting requirements you just have to get an "accept" through their automated underwriting system but the credit risk algorithm is pretty in line with FNMA's who has the 4 year waiting requirement. You could try, but it's unlikely to be approved until you hit that four year mark.

 

There are obviously non-qm alternatives that will allow you to get a mortgage with the BK but the rate reflects the risk. We're talking 5.5%+ at minimum to start for borrowers with excellent credit scores and low LTV loans.

Message 13 of 16
Grim4051
New Member

Re: Chapter 7. Is a new mortgage loan possible two years after discharge?

Our score is ok at 715. Two cc and a car note. Both low balances. But it would be 5.5% vs an FHA at 3% and FHA I can do after 2 years.

Message 14 of 16
ToofDoc
Contributor

Re: Chapter 7. Is a new mortgage loan possible two years after discharge?

I'm going through the same thing as you as we speak. My Chapter 7 just turned 2 years and I found a $425K townhouse that I want to buy.

 

My 5/4/2 FICO scores are:

EQX 689

TU 681

EXP 625

 

Here are my pre-approved options:

 

1) FHA loan

Rocket Mortgage

15-year fixed at 2.375% 

47% down ($200K)

 

2) Non-QM loan

mBanc

30-year fixed at 5.75%

20% down ($85K)

 

3) Portfolio loan (conventional)

Northwest Bank

15-year fixed at 3.0%

30-year fixed at 3.85%
57% down ($243K)

 

Guess which one I'll be going with?

Message 15 of 16
Grim4051
New Member

Re: Chapter 7. Is a new mortgage loan possible two years after discharge?

Great reply.

With the FHA you have PMI for 11 years or until you re-fi and with Convent one, no pmi. With rates said to increase next year making a refi more %, i'd assume #3? If not walk me through your thoughts.

Message 16 of 16
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