Recovering From Bankruptcy – Refresher…

I get asked about this a lot – so, I wanted to give you a little refresher on how you can get a mortgage when you have had a Bankruptcy in your life.
Chapter 7 Bankruptcy… You will need two years of seasoning after the discharge date of the Bankruptcy on your credit – for an FHA loan. …and, you can’t have ANY new derogatory information occur (lates, charge offs, collections) after the Bankruptcy discharge.

The other thing you need to do is to ESTABLISH NEW credit accounts after the BK. This is huge. …and a lot of people fail here. They don’t get new credit after a BK, but if you want to get a loan – you will need to.

Chapter 13 Bankruptcy… You can get an FHA loan once you have a documented 12 month pay history (with no lates).

So, YES – you can get an FHA loan while you are in a Chapter 13 Bankruptcy! …You will need a letter of permission from your trustee – but as long as the new mortgage payment isn’t appreciably more than you are paying now in rent – they usually will give their permission.

Also, on a 13 – You DON’T need two years of seasoning after the discharge. …as long as you have had minimum 12 months of good pay history. Many loan officers don’t get this – and I end up closing a lot of loans that people can’t get closed elsewhere for this very reason.

REMEMBER:  I can do FHA loans now down to 500 credit scores – read this blog post to learn more…