Getting a Mortgage after Filing Bankruptcy

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Getting a Mortgage after Filing Bankruptcy

To most of us the thought of filing for bankruptcy sounds so devastating and final. To file for bankruptcy is considered as throwing in the towel, giving up or calling it quits. This is cannot be further from the truth. A chapter 7 bankruptcy, which is the most common filing for bankruptcy, can truly be what it is most commonly referred to; a fresh start.

So is it possible to get a mortgage after filing bankruptcy by way of a chapter 7 bankruptcy? Absolutely, the real bankruptcy question is how long after you file for bankruptcy will it take you to be eligible to qualify for a mortgage?

Although you may think these bankruptcy questions can be answered by your bankruptcy attorney, this really is a question that can only be answered by your mortgage broker or loan agent. For instance the time clock starts ticking not after you file for bankruptcy but rather after your bankruptcy has been discharged.

The shortest amount of time it would take to qualify for a mortgage after a chapter 7 bankruptcy is discharged has been known to be as little as 2 years. However this is all contingent upon a number of factors.

The most important factor is what type of mortgage you are attempting to get. The guidelines for an FHA loan stipulate that at least two years must have elapsed since the discharge date of the borrower and / or spouse’s chapter 7 Bankruptcy.

Actually the FHA guidelines will consider a mortgage for a debtor in a chapter 13 bankruptcy repayment plan if those payments have been satisfactorily made and verified for a period of one year. However these are difficult approvals to get from the FHA and the trustee appointed when the bankruptcy lawyer filed for the chapter 13 bankruptcy has to give written approval to the FHA for the loan. A detailed explanation of the bankruptcy has to be submitted by the borrower with the loan application and re-established good credit needs to be shown. Job stability is also a must.

If you are attempting to obtain a Fannie Mae loan after filing for bankruptcy, the latest Fannie Mae guidelines show 4 years after the actual date of filing bankruptcy to be eligible for a mortgage.

If you go to a non conventional lender, which are becoming more and more scarce these days, the time period needed after a bankruptcy varies significantly depending on the lender. A lot of this has to do with all the negative bankruptcy news hitting us daily.

For all your bankruptcy questions consult with a bankruptcy attorney. The bankruptcy lawyer will guide you through how to file bankruptcy in the best way possible if you goal is to obtain a mortgage soon after bankruptcy.

Jay King is a owner of We’ve all heard of large companies filing for bankruptcy or “going bankrupt” and most of us would think that particular company must be in trouble.
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