Of course you can buy a home after you have filed for bankruptcy, but you may have to deal with some complications that other buyers do not have to contend with. A Montgomery County Chapter 7 bankruptcy lawyer can tell you more about some of the rules you need to know and why it’s important to take steps to rebuild your credit.
Will I Be Able to Get a Home Loan After Filing?
You can get a home loan after filing for bankruptcy, but you’re not going to be able to work with any mortgage lenders right away. There are usually waiting periods that need to end before you can get a home loan.
If you filed for Chapter 7 bankruptcy, you may have to wait for up to four years before applying for a loan. This is four years from when your debts are discharged, not four years from when you originally filed. Filers for Chapter 13 bankruptcy can also face waiting periods, and their length usually depends on when they filed for bankruptcy and when their debts were finally discharged.
What Kind of Loan Options Exist for Home Buyers Who Went Through Bankruptcy?
Another thing that can affect your waiting period for a home loan is what kind of loan you want to apply for. There are a few different types of mortgage options available, even if you have filed for bankruptcy in the past.
You can ask for a conventional loan or you can explore some government-backed options that tend to be a bit more lenient with their rules. Options could include:
A private loan: A home loan backed by a bank is often the most difficult kind of loan to get for bankruptcy filers. You usually have to wait four years from when the court dismissed your Chapter 7 bankruptcy case. For Chapter 13 bankruptcy filers, waiting four years from the date you filed or two years from the date your bankruptcy was dismissed is often necessary.
A USDA loan: A loan from the United States Department of Agriculture has a shorter waiting period. It’s three years for Chapter 7 filers and one year for Chapter 13 filers.
An FHA loan: A Federal Housing Administration loan can be available to a Chapter 7 after two years. A Chapter 13 filer just needs the court to dismiss their case before they apply.
A VA loan: The rules for a Department of Veterans Affairs loan are similar to those used for FHA loans.
What Steps Can I Take to Rebuild My Credit Faster?
While you wait to apply for a home loan, you should take steps to rebuild your credit as quickly as possible. This means avoiding taking out any other big debts and paying your bills on time. Before you know it, you’ll be looking at mortgage options and glad you put your financial troubles behind you.
Schedule Your Consultation With Our Bankruptcy Attorneys
If you are thinking about filing for bankruptcy, contact Mudrick & Zucker. We can schedule a consultation and take a closer look at your finances with you. If bankruptcy looks like a good option, we’ll help you navigate the process.
