What would you like to do?
Below are the perspectives of some Wiki s contributors about buying a house after bankruptcy:
- First, any bankruptcy must be "discharged" by the court. You also cannot be in any "Credit Counseling" or other programs that take over your finances. It is actually easier to buy a house than a used car. The "lender" is looking to meet several criteria. Debt to Income ratio, Stability and time on the job. Money in the Bank and bounced check history.Any Retirement or 401 K assets. In America money solves all problems. A big down payment means business.
- I am a Mortgage Lender and with a 15% down-payment plus closing costs, you can almost always find mortgage financing 1 day after the bankruptcy is discharged and filed at the courthouse.
- Many times if you have a home already and enough equity you can refinance right out of bankruptcy altogether, or refinance out of filing. You will need a broker who is willing to do a lot of work for you and a Bank is not the place to go for you until you have rebuilt your credit rating.
- I have spoken to several mortgage lenders, and almost all of the lenders agree that two years is the amount of time after your bankruptcy discharge that it takes to be able to get a decent mortgage. Granted, you may be able to get a mortgage sooner, but your terms (i.e. interest rate, etc.) will not be as attractive as it would be if you can wait 2 years. Considering that you'll be paying that interest for up to 30 years, it definitely saves you a lot of money if you can wait long enough after the discharge to get a good interest rate. Please note that nothing in this posting or in any other posting constitutes legal advice; this is simply my understanding of the facts, which I do not warrant, and I am not suggesting any course of action or inaction to any person.
- I am a Mortgage Loan Consultant and I have made it my area of expertise in working with people with bankruptcies, bad credit, and foreclosures. Firstly you do NOT have to wait 2 years to refinance after a chapter 7 discharge, those are for Fannie Mae loans. You can refinance a chapter 7 a day after discharge. A chapter 13 can also be refinanced before discharge since it's on a payment plan for 3-5 years from filing date. You can get a chapter 13 refinance as little as 12 months from filing, not discharge and you can payoff your chapter 13 in the process if you have enough equity in your home. Depending on your income, credit score, and trustee rating (if in a chp 13), you can qualify for upwards of 100% financing. There are major differences between a chapter 13 and chapter 7 refinance but that is for your mortgage broker to be aware of.
- It is not a question of time. If you qualify, you could buy a house the day after your discharge. If you qualify by having a large down payment, you may find yourself trying to explain to the bankruptcy judge where you got a 15% down payment (around $30,000 for the average house) when your Chapter 7 documents showed a lot less. Beware of mortgage lenders. There are still unreconstructed scam artists out there who will take your money and give you nothing but grief. There are some special programs for first time home buyers, but those usually require a history of good credit, a steady job and often some money in savings. Again, unlikely in a near post-Chapter 7 period. Pay your bills on time, save some money, keep the same job for a while. The more down-payment you can make, the better your chances - as long as you were not hiding assets in the Chapter 7.
Was this answer useful?
Thanks for the feedback!
That depends on how high an interest rate you are willing to pay. How much cash you can put down, issues of that nature. The general rule 18-24 months after your bankruptcy ha…s been discharged. Some lenders will see you as a better risk, because you will be more or less "debt free." There are many B/C Lenders and brokers with 80/20 programs (no monet down) the day you are discharged. Provided you still have a couple accounts that remained paid on time throughout the couple of months since you filed. Most people hold on to their cars or whatever. Also, having a perfect mortgage and rent history before, during and after Chapter 7 will add wonders to your overall picture. Because of the dramatic and recent changes in the Bankruptcy Law nationally there will be many approaching the gates with substantially better credit than most would expect. Ironically, there are many federal loans (FNMA, Freddie-Mac even 203K and of course FHA that don't even use credit scores) that will suffice and include your utilities as a credit line as long as you've got 12 months of solid, healthy payments. ans You probably mean can you get a mortgage. That is at every lenders discretion. New mortgage, new debt, an obligation to pay as agreed? Well, real tough - not impossible and certainly may depend on your downpayment. Especially with the concerns over subprime lending in todays market (which you by being in BK more than likely would be under most any view). You would have to expect that you would pay a very high interest rate, likely making it something even people with stronger financials wouldn't consider. if you filed C 13 make sure you discuss anything your doing with the BK trustee. Entering into a refinance or any financial contract without his explicit approval will end BK protection, and is sometimes prosecuted as fraud. Certainly, if it means you would have less disposable income to use toward your outstanding debt, he would have rightful objections. And consider....your in BK, presumably because you have more debt than you can pay, and you haven't been able to handle finances very well.....you cannot borrow you way out of debt, but even after clearing that in BK, you can sure find yourself in it again. YOU can get a loan the day after BK and even when in BK if you put enough cash down but you can't get this type of loan via banks; onlyl through private lenders.
There is no real limit as to when you can begin considering buying a home after a bankruptcy, though it is much more favorable to wait at least two years, while you build your… credit back up. Chapter 13 bankruptcy can remain on your credit report for up to ten years from the date it was filed. However, filing for bankruptcy can actually be somewhat beneficial for rebuilding credit. As bankruptcy eliminates all or most of your debts, your debt to income ratio improves. This means that more creditors will be willing to extend credit offers to you, which will allow you to begin the rebuilding process. Most credit obtained after a bankruptcy will most likely have high interest rates, but if you obtain credit that you can afford to repay, you will begin to see a definite improvement in your credit score. It is possible to begin the home purchasing process in as few as 18-24 months after filing bankruptcy. To start, you cannot be currently in a bankruptcy proceeding, your case must be decided. To begin the rebuilding process, check your credit report. Make sure that everything that is supposed to be included in the bankruptcy is included. After you've corrected any errors that may be on your credit report, it's time to start rebuilding your credit. Secured credit cards and installment loans are good ways to show creditors that you can again be trusted to pay back money that you owe before trying to jump right into a mortgage payment. When you are again able to qualify for a home loan, it might come with high interest rates. Don't panic. Try to make a larger down payment to keep the loan smaller, and make sure there are no prepayment penalties. This will offer you the possibility of refinancing at a lower interest rate as your credit improves.
The day you get your discharge paper. I do caution against that because ANY bad mark after a bankruptcy is taboo and you will not be able to finance anything for a long time.
answer to your question is about five years Ans This and many similar questions have been asked and fully discused several times before. Please refer to them…. Nothing prevents you from buying a house. Getting a loan may be a different story. That is a choice each lender makes, and certainly how much your down payment is, the quality and security of your job, amount of income for the debt, etc., all come in to play...as they do for anyone. Your ability/credability based on your past, not your desire or need. In todays (2007) mortgage market...getting a mortgage is getting much more difficult for anyone. Someone with a history of bankruptcy, even more so. The general rule of thumb is that it will be at least 7 years until lenders will not consider the bankruptcy.
The day you are discharged you can buy a car. You need to takeproof that you are discharged.
First...you probably mean get a loan to buy a house. Part of the BK processs is to start to understand that it isn't yours if you don't pay for it. Your a bankrupt...it will …be a fairly long time until you can get credit again, and in todays credit environment....a mortgage won't be possible until you prove yourself credit worthy for several years with other smaller things. More importantly, read the documents you swore under oath to abide by with the court, when pleading with them to provide you protection under the BK laws: You agreed you will not make any new debts, change any financial things much, etc without the approval of your case administrator first. Doing so will have your case dropped and very possibly contempt charges brough by the court. IT IS YOUR SOLEMN SWORN PROMISE AND TESTIMONY to the court....hopefully it means more than those same promises you gave previously to those who you borrowed money from. Actually, you can qualify for an FHA mortgage after 12 monthly payments to the Chapter 13 bankruptcy trustee. You must, of course, get the permission of your trustee to incur debt.
If you had an FHA insured home, you will have to wait for three years after the mortgage company claimed their refund.
Some institutions require 2 years, while others require 3 years from the discharge date. Some local banks and credit unions have created special programs allowing only 12 mont…hs if certain criteria is met, but often the credit requirements make nearly all applicants with a recent BK ineligible.
you can buy a house no matter what book you are reading.
Yes, you can buy a house for cash after filing for bankruptcy. The only issue is as to where those funds came from. If they were part of your estate at the time of filing and …not disclosed, then you will have a problem.
You can make new purchases and create new debt as soon as the day of the discharge of your bankruptcy action. However, if the cash your using was not disclosed in your bankrup…tcy, or was temporarily diverted to a friend or family member to avoid disclosure, then you may face federal problems if discovered. If you are using disclosed cash, or new assets you obtained after your bankrupcy you would not have any problems. However, if your looking for a mortgage for this new house, willingness of a financial institute to provide you with new debts or loans will vary depending on how this effected your credit and other factors. Prior to the problems in the mortgage lending industry it would have been possible, however today it is much harder since there really are no sub-prime banks anymore. I would say it may take a few years and diligent personal financial and credit management.
Immediately provided you are not married currently or divorce is final if there is a first wife. BK does not relate to marriage in any way.
Why should you get the title? If the debt is secured by the condo or house, you cannot get a discharge of that debt unless you surrender the asset in the chapter 7.
If the chapter 7 is still open, you cannot buy a house. If you have received your discharge and the case is closed (usually 6 months from the filing date), you should not have… the cash to buy a house unless you lied on your bankruptcy documents about your assets. That can lead you to prison. If you win a lottery or get a big inheritance within 6 months after the case is closed, you have to report it to the trustee. Your case will be reopened and the money will have to go to the bankruptcy estate to be distributed by the trustee. If you have been able to pay all your new bills as they come due and put some money into a savings account for three or four years, you can start looking for a house and a mortgage lender, but if you do not have enough savings to make a substantial down payment, you will not find a lender willing to lend you money for a mortgage. You may find a better reception if you have your accounts in a local credit union and ask them about qualifying for a mortgage.
Yes, you can buy a home after filing for bankruptcy. The question is going to be whether or not you can obtain financing. If you can wait 2 years after filing, you will ha…ve a better chance of obtaing a decent loan at a decent interest rate.