If you've been forced to file for bankruptcy, you may think that you'll never be able to get a home loan. While bankruptcy certainly affects your credit rating and may make potential lenders wary about underwriting a home loan, your ability to secure that home loan will improve as you recover from bankruptcy. How soon depends on the type of bankruptcy you filed, whether a foreclosure was involved in the bankruptcy suit and your actions after the bankruptcy.
Most loans carry a mandatory waiting period after bankruptcy before a loan can be approved. This number is the earliest that you can obtain this type of loan. Other factors, such as your payment history post-bankruptcy and your current income and assets, will also affect your approval.
Whether your bankruptcy included a foreclosure also affects how soon you can qualify for a new home loan. Key is whether your foreclosure and subsequent sheriff sale occurred before or after your bankruptcy filing date. Before is preferable to later. Most loan agencies will also take into account whether the foreclosure was caused by something that was out of the homeowner's control, such as illness or being called to active duty in the military reserves.
While getting a home loan after bankruptcy can be tricky, it's not impossible. Start by knowing the waiting period for the loans that apply to your circumstance and work to re-build your credit by paying your bills on time and using new credit judiciously.
The experts at Midland Mortgage are here to help you navigate through the mortgage process. Contact us today to get started!