Can You Get a Mortgage After Filing for Bankruptcy?
Filing for bankruptcy protection does not mean that you will never borrow money again. Yes, it has a negative effect on your credit score, but if a bankruptcy filing amounted to an outright ban on borrowing money or paying in installments, then it would not be meaningful for the same person to file for bankruptcy more than once, but serial bankruptcy filings are a well attested phenomenon. Before you file, your bankruptcy lawyer will advise you to start small with rebuilding your credit worthiness; that secured credit card will eventually turn into an unsecured credit card with a low credit limit. You feel the freeze on borrowing more intensely if you file for chapter 7 bankruptcy; chapter 13 is more like waving a magic wand and watching your debts more as you continue earning money, making payments on your bankruptcy-transformed debts, and even taking on new debts. It is even possible to qualify for a mortgage loan after you file for bankruptcy, as long as it is the right kind of bankruptcy filing and the right kind of mortgage loan. If you have recently filed for chapter 13 bankruptcy and are considering applying for a home mortgage loan, contact a Miami chapter 13 bankruptcy lawyer.
Mortgage Loan Waiting Periods After Declaring Bankruptcy
You can apply for a mortgage loan after filing for bankruptcy, but if your finances are in such bad shape that you had to file for bankruptcy, it will probably take a while to clean them up to where you can get approved for a mortgage. Besides this, certain bankruptcy actions come with certain waiting periods. If you file for chapter 7 bankruptcy, you must wait two years after the discharge of your debts before you can apply for a home mortgage loan. If you file for chapter 13, the waiting period for federally backed mortgages is one year from the time of filing. By this time, you will have shown a consistent track record of making payments on your chapter 13 repayment plan. If you file for chapter 13 but the bankruptcy court dismisses your case, you must wait four years before you can apply for a mortgage.
FHA Loans Are Your Best Bet for Buying a House After a Chapter 13 Filing
If you want to apply for a mortgage after a chapter 13 bankruptcy filing, you must wait until two years after you have completed your repayment plan. If you are applying for an FHA, VA, or USDA mortgage, though, the waiting period is only one year from the time of filing. FHA mortgages are the easiest kind to get, because the minimum credit score is 580, and the minimum down payment is 3.5 percent. You must also buy the property as your primary residence, not an investment property.
Work With a Debt Lawyer About Homeownership After Bankruptcy
A South Florida debt lawyer can help you prepare to apply for a home mortgage after filing for chapter 13 bankruptcy. Contact Nowack & Olson, PLLC in Miami, Florida to discuss your case.
Source:
themortgagereports.com/23259/mortgage-approval-with-chapter-13-bankruptc
