After declaring bankruptcy, you might feel like it’s the end of a healthy financial life. While bankruptcy does have lasting effects on some monetary aspects, it does offer a light at the end of the tunnel. For example, you can eventually purchase property after your bankruptcy.
How long after a bankruptcy can you get a mortgage? At Champions Mortgage, we offer cash-out refinance in Texas. We answer this and related hard-hitting questions below.
Types of Bankruptcy
You might file for bankruptcy if you can no longer keep up with financial demands, like bills, loan payments, and other asset compensation. The court releases you from your financial burdens through one of the following types of bankruptcy. How long after a bankruptcy can you get a mortgage? Explore bankruptcy types to find out.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is the more common type. The court gives you a clean slate by relieving you of qualifying debts. Your credit score will likely plummet as a result.
The Chapter 7 waiting period is typically between four to five years. Once the court dismisses your case, you can apply for loans again. You can use the waiting period to rebuild credit.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy has less severe consequences than the former. While you retain your debts, you can develop and present a repayment plan while accessing your assets. Therefore, you won’t likely struggle as much to qualify for new loans unless you escalate your bankruptcy filing.
Can You Qualify for a Mortgage After Bankruptcy?
Yes, you can still qualify for a mortgage after filing for bankruptcy. However, you must fit common application criteria by:
- Enduring the waiting period until case dismissal.
- Applying for loans that accept formerly bankrupt debtors, such as the FHA loan.
- Rebuilding your credit score.
- Communicating your situation to potential lenders.
How long after a bankruptcy can you get a mortgage? The time frame depends on the dismissal, among other factors.
How Long After a Bankruptcy Can You Get a Mortgage?
The minimum waiting period for bankruptcy is a year for Chapter 13 and four to five years for Chapter 7. Examine some other factors below that might influence your mortgage acceptance.
Credit Repair
Bankruptcy filings may stay on your credit report for up to ten years. However, you might improve your score within two or three years. Open and use lenient lines of credit wisely to increase your score.
Document Bankruptcy Details
If possible, present a detailed timeline to potential lenders documenting your efforts to improve your financial situation. You might include which lines of credit you use, how you use them, and other spending aspects. Add information about your bankruptcy circumstances and precautions you’re taking to prevent it from happening again.
Seek Pre-Approval
Pre-approval can take seven to 10 business days from your application submission. It allows you to get a headstart on building rapport with the lender and can simplify your home-buying efforts later. Apply for pre-approval as soon as your waiting period ends or you’re ready.
Communicate With Lenders
Maintain open lines of communication. Answer questions from lenders truthfully to build a trustworthy relationship. You might be pleasantly surprised at how far candidness will take you in your renewed homeownership endeavors.
Contact Champions Mortgage About Mortgages After Bankruptcy
How long after a bankruptcy can you get a mortgage? Bankruptcy may stay on your credit report for up to a decade. However, you can apply for mortgages as soon as your waiting period ends.
Learn more about the basics of mortgages from Champions Mortgage in Texas. Apply for a loan with us through our convenient online application or call (281) 727-2500. Your journey to a new home has just begun!
