The Money Coach
  • About
    • Meet Lynnette
    • Media Kit
  • Contact
  • Subscribe
  • QR Code
  • Books
  • Categories
  • Coaching
  • Hire Lynnette
  • Money Coach University™
  • The Money Coach Recommends™
No Result
View All Result
The Money Coach
  • About
    • Meet Lynnette
    • Media Kit
  • Contact
  • Subscribe
  • QR Code
No Result
View All Result
The Money Coach
No Result
View All Result

Can I Qualify for a Mortgage After Bankruptcy?

Lynnette Khalfani-Cox, The Money Coach by Lynnette Khalfani-Cox, The Money Coach
in Loans
Reading Time: 3 mins read
mortgage after bankruptcy
11
SHARES
185
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

Q: My husband and I are in our final year of bankruptcy this year. We did a chapter 13 in sept 2010.

Income has significantly increased over the years and we would like to purchase a new home this year.

My question is how soon after our bankruptcy disclosure might we qualify for a loan – with a down payment?

If possible, are there lenders you can recommend who might be best to deal with in these situations?

Finally what steps can you recommend we take between now and (hopefully year end) so we can qualify? Any help you can give would be appreciated!

A: Your bankruptcy won’t stop you and your husband from getting a mortgage, but it may not be as soon as you’d like. That’s because your eligibility for various mortgages depends on the type of bankruptcy you filed and the outcome of that bankruptcy. 

Most banks want you to conform to Fannie Mae guidelines and here’s what Fannie says. Fannie Mae distinguishes between Chapter 13 bankruptcies that were “discharged” versus those that were “dismissed.”

I’m not sure what’s the case for you, but I think you meant to say that your bankruptcy will soon be “discharged.” (In your original email, you asked about “disclosure” — you said: “My question is how soon after our bankruptcy disclosure might we qualify for a loan – with a down payment?”)

Again, I’m assuming you meant a bankruptcy discharge. But let me tell you the rules either way.

— With a Chapter 13 bankruptcy that’s been discharged, you have to wait two years before you’re eligible for a mortgage.

With a chapter 13 bankruptcy that’s been dismissed, you need to wait four years before you’re eligible for a mortgage. However, if you had “extenuating circumstances” — like job loss, death of a family breadwinner, extreme medical illness/healthcare bills, etc. – then your waiting period after a dismissal can be reduced to two years.

See this Fannie Mae document re: mortgage qualification after a negative credit event, including bankruptcy.

Now let me address your other question. There are lots of things you can do to start preparing yourself for homeownership. Begin by pulling your credit reports from annualcreditreport.com. Make sure there are no errors on your or your husband’s credit files.

It’s good news that your income has risen. Make sure you pay ALL your bills on time. That alone will help boost your credit scores.

Also, don’t apply for any credit. You don’t want inquiries to lower your credit scores.

If you have credit card bills (probably not), pay down debt. If not, pay down other debts like auto loans, student loans, etc. That will help lower your debt-to-income ratio and help you qualify for a mortgage.

Finally, here is an article I wrote about getting ready to buy a home and how to prepare for a mortgage.

10 Practical Tips to Prepare to Buy a Home This Year

If you follow these tips and the advice in that article, you won’t have any trouble at all finding a lender willing to work with you and approve you for a mortgage.

Tags: mortgage after bankruptcy
Previous Post

How to Start a Conversation About Money with Your Children

Next Post

5 Horrible Things About the GOP Tax Plan

Related Posts

PPP Loan

Who Qualifies for the SBA PPP Loan?

by Lynnette Khalfani-Cox, The Money Coach

The $349 billion Paycheck Protection Program (PPP), which offers forgivable PPP loans to America’s small business owners and contractors, is shaping up as one of the most in-demand lending programs ever from the Small Business Administration. After the PPP loan initiative was in effect for only 3 business days, on...

cosigning a loan for family or friends is a major decision.

The Pros and Cons of Cosigning a Loan for Family & Friends

by Guest Blogger

Blending family, friends, and finances can be risky. A variety of emotions are attached to the decision to cosign a loan for a friend or family member. They may sincerely need your help, or you may feel an obligation to help because they have provided financial assistance in the past....

AskTheMoneyCoach- HELOC

Is a HELOC Right for You? Pros, Cons, and Considerations to Make

by Guest Blogger

A home equity line of credit, or HELOC, is a popular way to finance everything from home remodeling or repair to debt consolidation, or even a vacation. If you’re a homeowner, you’ve probably heard of them, but should you apply for one? Here’s what you need to know. What is...

crowdfunding

4 Ridiculous Crowdfunding Requests That I Will Not Support – So Don’t Ask

by Lynnette Khalfani-Cox, The Money Coach

Crowdfunding in the Internet age started off with the mostly honorable intentions. At first, the main idea was to use social media to let people from all around the world chip in money to help out others in need or worthy causes. That’s why we’ve seen people donate in droves...

payday loans and millenials

Are Payday Loans the New Credit Cards for Millennials?

by Lynnette Khalfani-Cox, The Money Coach

Every year, 12 million Americans take out payday loans, spending more than $7 billion on loan fees alone, according to research from The Pew Charitable Trusts. While people of all age groups and backgrounds get high-cost payday loans, studies show that Millennials are now turning to payday loans at a faster clip than...

loans

Get a Loan With No FICO Score Needed, No Joke

by Lynnette Khalfani-Cox, The Money Coach

Before you can get a mortgage, student loan or personal loan, lenders usually first check your credit score. But one lender – a San Francisco-based startup called SoFi – is changing all that. In fact, you can get a loan with SoFi even if you have no credit score at...

Fannie Mae

Fannie Mae Making It Easier for African-Americans, Latinos to Get Mortgages

by Lynnette Khalfani-Cox, The Money Coach

Fannie Mae is rolling out a series of new mortgage rules that will make it easier for African-Americans, Latinos and others to qualify for home loans. Under recently announced guidelines, starting in 2016 Fannie Mae will require mortgage lenders to take into account non-traditional credit data from potential homebuyers, such...

Load More

Popular Posts

  • Car repair

    What to Do If You Can’t Afford a Car Repair Bill

    1378 shares
    Share 551 Tweet 345
  • What to Do if Your Spouse Stole Money From You

    1166 shares
    Share 466 Tweet 292
  • What to Do If You Can’t Afford to Leave Your Spouse

    1104 shares
    Share 442 Tweet 276
  • Here’s Why I Pay My Kids For Good Grades (And Maybe You Should Too)

    1011 shares
    Share 404 Tweet 253
  • What Do All Those Strange Codes In My Credit Report Mean?

    815 shares
    Share 326 Tweet 204
  • Do This Now If Your Wages Were Not Reported

    745 shares
    Share 298 Tweet 186
  • How to Find Out if a Debt Collector is Licensed to Collect Your Debt

    724 shares
    Share 290 Tweet 181

All information on this blog is for educational purposes only. Lynnette Khalfani-Cox, The Money Coach, is not a certified financial planner, registered investment adviser, or attorney. If you need specialty financial, investment or legal advice, please consult the appropriate professional. Advertising Disclosure: This site may accept advertising, affiliate payments or other forms of compensation from companies mentioned in articles. This compensation may impact how and where products and companies appear on this site. AskTheMoneyCoach™ and Lynnette Khalfani-Cox, The Money Coach® are trademarks of TheMoneyCoach.net, LLC.

©2009-2023 TheMoneyCoach.net, LLC. All Rights Reserved.

RSS / Sitemap /Submit an Article / Privacy Policy / LynnetteKhalfaniCox.com

No Result
View All Result
  • Books
  • Categories
  • Contact Lynnette
  • Get Coaching
  • Hire Lynnette
  • Money Coach University™
  • The Money Coach Recommends™
  • Home
  • Subscribe to Newsletter
  • QR Code

©2009-2021 TheMoneyCoach.net, LLC. All Rights Reserved.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist