Bankruptcy and Qualifying for a Loan

In today's economic climate, there are many people who have had to file for Chapter 7 or Chapter 13 Bankruptcy. I recently had a buyer ask how this would impact their ability to qualify for a loan.

If you filed for Chapter 7 bankruptcy, you will be able to qualify for an FHA or VA loan two years after your discharge date. This is contingent on your credit score and other factors that would go into a pre-approval.

If you filed for Chapter 13 bankruptcy, you are also able to qualify for an FHA or VA loan two years after filing, and you can still be in repayment as long as you have made 12 months of consecutive on-time payments but you need permission to obtain a mortgage not only from a lender but also from the Court and Trustee you are paying.

To qualify for a Conventional mortgage, your bankruptcy filing needs to have been at least four years ago.

If you have filed for bankruptcy and need assistance determining whether you can be pre-approved for a loan, first you should verify the date on your filing paperwork. Your next step would be to speak with a lender who can determine your qualifications based on employment history, income, debt, and credit score. If you're not sure of who to contact, your real estate agent can put you in contact with the right people.