Debt and Bankruptcy
Mortgages

How soon after Chapter 7 bankruptcy can you buy a new house?

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Wiki User
2015-07-16 19:28:08

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.


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