We have written many posts in this blog about individuals who have resolved their financial issues through a bankruptcy filing. But what happens after a Chapter 7 or Chapter 13 bankruptcy is complete? Many believe that they do not have any options when it comes to either purchasing residential property or refinancing an existing loan. This however, is not always true.
After someone has completed a consumer bankruptcy he or she may think that it is necessary to wait 7 to 10 years to try to buy a home. While this period of time is relevant when it comes to bankruptcies, it is the number of years information regarding a bankruptcy will likely stay on one’s credit report, not how long one has to wait before seeking to secure a mortgage.
The actual period of time is much shorter and is dependent on both the type of mortgage one is seeking to secure as well as the chapter under which the person filed. Individuals who have completed a Chapter 7 or Chapter 13 bankruptcy and are seeking a conventional mortgage will have to wait between two and four years after the filing is complete. Those interested in securing a Federal Housing Administration mortgage only have to wait a maximum of two years or one year respectively.
People may be interested to know that under some circumstances, the time in which a person must wait to seek a mortgage could be even shorter. While not the easiest to secure it is a possibility. These circumstances include:
- The death of a spouse
The most important thing anyone who has completed a bankruptcy and is seeking to get a mortgage needs to do is the same thing that those who have not filed for bankruptcy need to do–establish good credit.
Source: New York Times, “Life After Bankruptcy,” Vickie Elmer, Sept. 13, 2012