Home Ownership After Bankruptcy, Foreclosure, Short Sale
Many people believe that if they file bankruptcy, short sell their home, or lose their home to foreclosure they will never qualify for a mortgage again. While it is true that bankruptcy, foreclosure, and short selling will negatively impact your credit, it is not the end of the world and it is quite possible that you will qualify for a mortgage within a few years.
Home Ownership After Bankruptcy
If you file a Chapter 7 bankruptcy (debt liquidation plan), you may qualify for a mortgage two years after the discharge date. However, you must have either re-established a good credit history or chosen not to incur any new debts. Additionally, you must be able to demonstrate your ability to manage your financial affairs. The strongest indicator that you are indeed able to manage these obligations is to pay all your bills on time after the bankruptcy so as not to have any negative entries on your post-bankruptcy credit report.
If you file a Chapter 13 bankruptcy (debt consolidation plan), you may qualify for a new mortgage after having made one year of Chapter 13 plan payments and post-petition mortgage payments on time. Keep in mind that you must obtain authorization from the bankruptcy court before you may incur any new debt as long as your Chapter 13 case is pending.
Home Ownership After Foreclosure
If you lose your home to foreclosure, you may qualify for a mortgage after a minimum of three years. The same is true if you transferred the home via a deed-in-lieu of foreclosure or short sold it. Whether you will qualify for a mortgage will depend largely on how you have managed your financial obligations since the foreclosure, deed-in-lieu, or short sale.
Whether you filed bankruptcy, lost your home to foreclosure, or short sold it, in order to qualify for a new mortgage, you will be required to provide the lender with a detailed credit explanation. Be be prepared to make full disclosure about the circumstances that resulted in the bankruptcy, foreclosure, or short sale.
Home Ownership After Bankruptcy
If you file a Chapter 7 bankruptcy (debt liquidation plan), you may qualify for a mortgage two years after the discharge date. However, you must have either re-established a good credit history or chosen not to incur any new debts. Additionally, you must be able to demonstrate your ability to manage your financial affairs. The strongest indicator that you are indeed able to manage these obligations is to pay all your bills on time after the bankruptcy so as not to have any negative entries on your post-bankruptcy credit report.
If you file a Chapter 13 bankruptcy (debt consolidation plan), you may qualify for a new mortgage after having made one year of Chapter 13 plan payments and post-petition mortgage payments on time. Keep in mind that you must obtain authorization from the bankruptcy court before you may incur any new debt as long as your Chapter 13 case is pending.
Home Ownership After Foreclosure
If you lose your home to foreclosure, you may qualify for a mortgage after a minimum of three years. The same is true if you transferred the home via a deed-in-lieu of foreclosure or short sold it. Whether you will qualify for a mortgage will depend largely on how you have managed your financial obligations since the foreclosure, deed-in-lieu, or short sale.
Whether you filed bankruptcy, lost your home to foreclosure, or short sold it, in order to qualify for a new mortgage, you will be required to provide the lender with a detailed credit explanation. Be be prepared to make full disclosure about the circumstances that resulted in the bankruptcy, foreclosure, or short sale.
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