Waiting period for co-applicant on mortgage loan.

[Berkster]

Hello,

Does anyone know if a co-applicant that has filed and bk a year ago be on a mortgage loan and if they can't be a co-appllicant on the loan can I use their income as part of the preapproval process? My FICO scores are good and my annual income is a little over 50k a year. My monthly debt alone is roughly $1100 before a mortgage is figured into the equation. My fiance has no debt now because of the recent bk filing. The home we are looking at is 219k. Thank you in advance for the feedback.

[homeloanexpert]

Yes, an individual can be considered for a home loan having recently filed a bankruptcy. But it makes a big difference which type of BK was filed and if it has been discharged. You stated your co-borrower has recently filed, was it a Chapter 7 or13? Your Fiancé also filed BK. Was it a Chapter 7 or 13?

So you understand, a Chapter 13 is a reorganization of the debts and the person is given a repayment plan. A Chapter 7 is completely different, as all debts can be wiped away with the exception of government backed student loans, child support and alimony.

[Berkster]

Thank you for the reply. She filed Chapter 7 and it was discharged February 2018. She is the only one with the bankruptcy and I didn't know if she could be on the loan or if her income can be considered since it has been less than a year being discharged. 

[homeloanexpert]

Having a Chapter 7 that was discharged as recently as February 2018, that means her BK has 4 months seasoning. Since FHA and VA require at least 2 years waiting period (without extenuating circumstances like a death or serious illness in the immediate family) she has another 20 months to go in order to be considered for a home loan.

Therefore, the only loan you all will qualify for is a NonQM / Portfolio which comes with higher rates and fees. I wouldn't use this person unless it absolutely necessary. Lastly, you are unable to her income to help you qualify unless they are included on the loan.

Best wishes to you!

[Berkster]

I belive I can go it alone then using my VA benefits after I reduce by monthly debt some more. We have time. Thank you for the information

[homeloanexpert]

Clearly VA is your best bet and thank you for your service. I too am a Veteran and have been doing VA home loans for over 30 years. Let me know if you have any further questions.

Best wishes to you.