How Soon After a Chapter 13 Bankruptcy Can You Buy a Home
DETROIT – Have you ever filed for bankruptcy? If so, it may seem like you will never be able to get back on your feet financially. The truth is, bankruptcy doesn’t leave a permanent mark on your credit report. If you know the procedures to follow, you can even buy property after bankruptcy.
How long after bankruptcy can you buy a house?
You will have to wait for your bankruptcy to be discharged – or dismissed if it does not meet the conditions – before you can take out a loan. But how long exactly do you have to wait? The answer depends on the type of bankruptcy you have and the type of loan you are looking for.
Chapter 7 bankruptcy is the most common type of bankruptcy. A judge removes your qualified debts via a Chapter 7 bankruptcy. Unfortunately, your credit will also suffer. To qualify for a conventional loan following a Chapter 7 bankruptcy, you must wait at least 4 years after the court discharges or dismisses your bankruptcy. Government-sponsored mortgages are a little more forgiving. To acquire a loan from the United States Department of Agriculture (USDA), you must wait three years after your bankruptcy has been dismissed or discharged. You only need to wait two years after your release or termination to apply for a loan from the Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA).
The consequences of a Chapter 13 Bankruptcy in Illinois for example, are less severe than those of a Chapter 7. Rather to eliminate debt, Chapter 13 is to reorganize your debts. This may require regular payments to your creditors. Chapter 13 bankruptcy also has a lower impact on your credit score and allows you to keep your assets. The length of time you must wait to apply for a conventional loan after a Chapter 13 bankruptcy is determined by the court’s decision. If your bankruptcy is rejected by the court, you must wait at least four years before reapplying.
If your bankruptcy is overturned by a court, post-bankruptcy borrowers must wait four years from the date of filing and two years from the date of termination before applying for a conventional mortgage that meets Fannie Mae’s requirements. Government-backed loans have less stringent requirements than Chapter 7 bankruptcy. After a Chapter 13 bankruptcy, USDA loans require a one-year waiting period. Whether you are fired or fired, you must wait the same amount of time. Before applying for an FHA or VA loan, you must have your debt discharged or discharged by a court.
This article was provided by Hannah Madison