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When Can I Get a New Mortgage Loan After a Foreclosure or Bankruptcy?

Bankruptcies and Foreclosures were common just a few years ago and are still occurring. The vast majority of our Clients have never experienced these problems or procedures before, but often there simply are no other sensible options.

Understandably, Clients are concerned as to how these procedures will affect them. They ask how much their credit will be damaged, how long will the damage last and when can they consider buying a home again.   The answers to these questions will be different for each person. Some recover quickly—usually those with good jobs—and others continue to have financial difficulty. However, some answers are available.

Included below is information about how long potential buyers must usually wait before applying for mortgage financing. As it turns out, the wait can be different depending upon the type of loan being applied for.

 

Conventional

Foreclosure                          7 years from the date completed to the disbursement date of the new loan

Chapter 7 Bankruptcy         4 years from discharge or dismissal date

Chapter 13 Bankruptcy                        2 years from discharge OR 4 years from dismissal date

 

VA

Foreclosure                          2 years from the date completed and title transfer back to lender

Chapter 7 Bankruptcy         2 years from discharge or dismissal date

Chapter 13 Bankruptcy    1 year payout has elapsed with all payments made on time and with Court

                                                         permission for new mortgage loan. No wait time if discharged or dismissed.

FHA

Foreclosure                          3 years from the date completed and title transfer back to lender

Chapter 7 Bankruptcy         2 years from discharge or dismissal date

Chapter 13 Bankruptcy     1 year payout has elapsed with all payments made on time and with Court

                                                         permission for new mortgage loan. No wait time if discharged or dismissed.

 

This information is based upon current lending guidelines and is provided as general information only. Lending guidelines are subject to change. Individual circumstances differ. Always consult with your mortgage lender or broker to learn whether or not you are eligible for a mortgage loan and what type of loan you might qualify for. Depending upon your circumstances, you may qualify for a new mortgage loan sooner or later than the above chart would indicate.

The lawyers at Platt and Westby, P.C. have been practicing in the area of Bankruptcy law for over 40 years. Contact any of our Phoenix Bankruptcy lawyers at 602-277-4441 or use the e-mail contact utility on our website at www.plattwestby.com to schedule a no-fee initial conference concerning any Bankruptcy matter. We will answer your questions and, where appropriate, suggest potential solutions.

Platt and Westby, P.C. has offices in Phoenix, Arrowhead, Avondale, Scottsdale and Gilbert, Arizona.