Can i qualify for a mortgage after bankruptcy
Although bankruptcy eliminates some or all of your personal debt, it causes severe damage to your credit score. Many people who file bankruptcy have trouble qualifying for a regular credit card, so what chance do they have of obtaining a mortgage. Luckily this damage to your credit is only temporary and in as little as 2 years after your bankruptcy is discharged, you can qualify for a mortgage.
How to qualify for an FHA loan after bankruptcy
If you’re wondering where to get home loans after bankruptcy? Don’t look any further than the FHA. The FHA loan is a federal assistance loan program insured by the Federal Housing Administration. It’s purpose is to insure loans so lenders can offer better terms and many times accept borrowers who may not have qualified by traditional means.
In order to obtain an FHA loan after bankruptcy you need to reestablish your credit and prove you can manage your financial affairs. Re-establishing credit can be as simple as opening a new credit card account after the bankruptcy is discharged and maintaining that card responsibly.
The FHA will also consider people who decide to refrain from using credit after their bankruptcy. If you decide not to incur new credit, the FHA will use non-traditional credit such as rental and other credit as a means to prove financial responsibility.They’re looking for a history of on-time payments.
If you have a stable job, the financial means to pay the mortgage and you’ve re-established credit, and you filed for a Chapter 7 bankruptcy this is all that is required to qualify for an FHA loan. If you filed Chapter 13 you need to have made your last 12 payments on time and have written permission from the court to enter into a mortgage.
Applying for an FHA loan after bankruptcy is as simple as going to your local lender. You’ll still need to complete a traditional loan application. You need proof of your income, assets and credit worthiness. You may also need to have an explanation of the bankruptcy, and why the events that led up to it are not likely to recur.
Now that you know where to get home loans after bankruptcy, you can see that homeownership is possible. Bankruptcy has helped many people get back on their feet and re-establish their credit, and with the help of FHA loans, they also have the ability to buy a house.