December Market Update for Louisville and Kentuckiana
Click below to hear Monica discuss the current market. She also discusses options after bankruptcy or short sale.
After you file for bankruptcy, it can take time to rebuild your credit and savings back up. Lenders want proof that the financial situation has fully recovered before approving new mortgages. Lenders require a minimum waiting period or "seasoning" when applying for a mortgage after filing bankruptcy.
When can I buy a home after a bankruptcy?
After you file for bankruptcy, it can take time to rebuild your credit and savings back up. Lenders want proof that the financial situation has fully recovered before approving new mortgages. Lenders require a minimum waiting period or "seasoning" when applying for a mortgage after filing bankruptcy.
Part of creating trust in your financial stability is time. In most situations, anyone who has gone through Chapter 7 proceedings will have the seasoning period listed below. There are always exceptions.
FHA loan – 2 years
VA loan – 2 years
USDA loan – 3 years
Conventional (Fannie Mae or Freddie Mac) loan – 4 years
Note: These are the minimums required by each loan program. Some lenders will require you to wait longer. AnnieMac Louisville uses the above seasoning times in most cases.
You can set yourself up for success by increasing your credit score and saving a larger down payment. Both of these strategies will help you get lower mortgage rates and overall cost when buying a home. Lower interest rates mean that not only are more homes available to you, but that you’ll be spending less each month. It’s truly a win win.
Take the time to get your credit score as high as possible and save for a bigger down payment. Both strategies will help you get a lower mortgage rate and a more affordable home loan when you do buy.
FHA has a shorter seasoning period at only 2 years. You’ll also need to meet the following requirements to receive after your two year waiting period
Credit score of at least 580
Down payment of 3.5% or more
Steady income and employment
Additional requirements apply - Contact George Dunlap at AnnieMac mortgage Louisville to see if you qualify. GDunlap@annie-mac.com M:502-264-1054
Keep in mind that a bankruptcy filing stays on your credit reports for up to 10 years, but it does not mean you can’t buy a home. “Contacting a mortgage broker to discuss your individual circumstances is the first step to buying a new home. Don’t assume, let me help you. You may be one of the exceptions. If you do need to wait the stated times, I can help you be in the best position possible and ready to buy as soon as the requirements are met.” - George Dunlap - Mortgage Loan Originator NMLS #:2115932