Qualifying for a mortgage after bankruptcy

| Apr 29, 2019 | chapter 7 |

If you are overwhelmed by debt, then a Chapter 7 bankruptcy may offer you a good chance to not only cease any activity that your creditors in East Orange have taken against you, but also allow for the chance to re-establish yourself financially. This latter benefit comes from the potential of having many of your debts discharged. Yet the price for enjoying it may be high, and that comes from the toll bankruptcy can take on your credit. Among the most common questions those looking to file for bankruptcy ask us here at Goldman & Beslow, LLC is how long after filing will they be able to qualify for a substantial loan (e.g. a mortgage).

There may be no easy answer to that question. If you have a large enough of a down payment, lenders may be less concerned about loaning you money. That means that (in theory) you would only need to wait long enough to secure such a down payment. Yet given your need to file for bankruptcy, your ability to save enough money for a large down payment may be unlikely.

Many traditional lending programs have their unofficial timelines for applying for a mortgage following a Chapter 7 bankruptcy. According to LendingTree.com, they are as follows:

  • Conventional: 4 years from discharge
  • USDA: 3 years from discharge
  • FHA and VA: 2 years from discharge

You should remember, however, that simply because lenders may be willing to consider your application, that does not mean that it is not in your advantage to wait until your further away from bankruptcy to try and get a mortgage. Doing so not only gives you additional time to save for a down payment, but it can also increase the chances of you getting a better rate. More information on recovering from bankruptcy can found throughout our site.