Getting mortgage after bankruptcy - go FHA
The turmoil in the real estate shows no signs of abating. Lenders are very selective and getting a mortgage loan is often difficult even for the people with good credit. If you have bankruptcy recorded on the credit report, chance of getting mortgage shortly afterwards is close to zero. Yet it is still possible and I can not emphasize enough, that dealing with a mortgage professional who completely understands FHA loan requirements and qualifications is imperative.
Getting mortgage after bankruptcy - long wait for a conventional mortgage
The increased regulations and scrutiny within the mortgage industry make getting mortgage after Chapter 7 bankruptcy discharge very problematic - if you try to go with a non FHA loan. You can very well repair credit but to get a conventional mortgage, the one that eventually ends up at either Fannie Mae or Freddie Mac will take 4 years after the discharge. That is a long wait and yes, you may hear that if you furnish proof of the extenuating circumstances, you must only wait 2 years, but in reality it is very unlikely to happen. The lenders still will be very reluctant to lend you the money so soon after the bankruptcy discharge, simply because they want to see your ability to generate and, most importantly, sustain regular income stream and pay the bills - even if your FICO score improves. More than anything, they want you to demonstrate financial discipline for an extended period of time, lack of which they may think, force you to file for bankruptcy on the first place.
Getting mortgage after bankruptcy - FHA is the way
FHA loans are backed by the Federal Housing Administration, so a lender is more comfortable lending money, knowing that your mortgage will be paid off in full if you default. To secure an FHA loan Chapter 7 bankruptcy must be discharged for 24 months, while Chapter 13 must be discharged for 12 months.
While time is huge factor, there are other things you have to accomplish. You need to get a decent credit score for FHA loan, because the minimum needed is 640. Then you must have a down payment and sizable liquid assets. Still, that doesn't guarantee you will be getting mortgage, but chances are you will. Those are the three things you can hopefully control and need to concentrate on. However, lending rules and regulations may change in a blink, so getting mortgage loan after bankruptcy harder or easier.
Wed Aug 3, 2011 12:08PM | Copyright: www.bad-credit-advisor.com | More in Mortgage | Comments (0)
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