This is a pretty common question. Most people are just chomping at the bit to get started after their Chapter 7 has Discharged and they know the 2-year waiting period is approaching. The truth is, I tell all my clients It's never too early to start the process of preparing for a home loan. For sure I tell them to start the process at least 90 days prior to wanting to apply for a home loan.
In your case, the Lender cannot request the FHA case number prior to that 2-year anniversary of the discharge. But there are some things credit wise you should be doing now to prepare for prior to applying. For example, you want to make sure all your debts listed in your schedules 0f creditors and that were discharged, show no outstanding balances. Once you be BK is discharged, all your balances should be swept clean.
If there are debts that still show with the balances (that were included in your BK) this can definitely lower your score so you'll need to send in your bankruptcy petition w/ schedules along with the final discharge to all three credit bureaus and requested they purge your file. Hopefully over the last several months you have started the process of rebuilding your credit. If you have not you need to start that process immediately.
There are a number of secured credit cards that will accept an applicant with a prior bankruptcy. Whether or not you should extend your lease or move in with a family member, that would be your decision. Your loan application will look stronger with a history of paying rent, on time, over the most recent 12 months prior to your loan application. But FHA will allow no recent rental rating providing you are living with a family member rent free.
But if you can swing it and move in with a family, that would allow you to save your money and work on your credit. Make sure you hook up with a good experienced loan officer to walk you through this process. I hope this helps!
Best wishes to you
Branch Manager - Specializing in FHA, VA, USDA, Conventional, Jumbo, Portfolio and Non-QM Loan Products.
