Bankruptcy cripples your finances and will make it difficult for you to find financing for a while. However, if you need to refinance or you want a mortgage on a new home, Midland Mortgage Corporation has access to bankruptcy-friendly loan programs. We will prepare you to secure the best rates for your mortgage as soon as funding is available to you. However, there are several issues affecting your access to the most popular programs.
Homebuyers who file Chapter 7, and essentially erase most of their debts, are seen as bigger liabilities. You’ll find you have longer waiting periods compared with those who file Chapter 13 and have completed timely payments. Expect to wait two years following Chapter 7 discharge and one year of on-time Chapter 13 payments for FHA or VA loans, three years or one year respectively for USDA loans and four years or two years for conventional lenders.
Filing bankruptcy, all by itself, will seriously drive your credit score down. Thankfully, you can begin to rebuild immediately. Work with a mortgage consultant as soon as possible to fix your credit reports before you apply for a new loan. Because we focus exclusively on the residential loan market, we know many tricks and helpful tips for cleaning up your credit, including the most effective ways of inspecting your reports and fixing inaccuracies.
While you may qualify for certain low down payment options post-bankruptcy, with traditional lenders, a larger down payment can mean the difference between a rejection and an approval.
Essentially, once you’re eligible to apply for a home loan, you must still meet the requirements other borrowers have to face, which can be difficult post-bankruptcy for many reasons. Work with residential mortgage specialists to increase your chances of success.