Even though going through the bankruptcy process may have been the best decision for you financially, it may have still been one of the most difficult times in your life. With that, you may not want anything more than to get a fresh start in all aspects of your life, including moving into a new home. This is especially true if you had to give up your former property to liquidate funds to pay off your debts in bankruptcy. Well, if this is your new goal, please follow along to find out how to get a mortgage loan after your bankruptcy case and how a proficient Rockland County bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq., P.C., can help better your chances.
Is it possible to get a mortgage loan after bankruptcy?
While it is possible to secure a mortgage loan after your bankruptcy filing, it does not come without its set of challenges. For one, mortgage lenders may be initially hesitant to approve you for a loan, given the bankruptcy history on your record. And secondly, you may be held to a mandatory waiting period before you are even eligible to apply. Now, the duration of this waiting period may depend on the type of consumer bankruptcy you filed for, along with whether you are seeking a conventional or government-backed mortgage loan. More specific examples read as follows:
- For a conventional loan: the waiting period is two or four years from the discharge date for Chapter 13 or Chapter 7 bankruptcy, respectively.
- For an FHA or VA loan: the waiting period is one or two years from the discharge date for Chapter 13 or Chapter 7 bankruptcy, respectively.
- For a USDA loan: the waiting period is one or three years from the discharge date for Chapter 13 or Chapter 7 bankruptcy, respectively.
Can extenuating circumstances improve my chances of a loan?
Understandably, you may not want to wait one or more years until you can own real estate property once again. Plus, you may believe that you gained the financial tools necessary in your mandatory debtor education course after bankruptcy that make you well-equipped to take on a mortgage loan. With these things in mind, you may look into whether you have valid extenuating circumstances that can shorten this mandatory waiting period. Specifically, “extenuating circumstances” mean significant, non-recurring events beyond your reasonable control that caused financial hardship. Examples of such, which you may cite on your mortgage loan application, read as follows:
- You may claim that you were diagnosed with a serious illness that demanded expensive medical care to treat.
- You may claim that your spouse, a wage earner who contributed to paying your expenses, has recently passed away.
- You may claim that your spouse recently filed for divorce and prompted a dramatic shift in your income and assets.
- You may claim that your employer let you go from your job position due to budget cuts or company restructuring.
If you need help preparing for this upcoming bankruptcy or mortgage loan process, turn to a talented Rockland County bankruptcy attorney. We at The Law Offices of Allen A. Kolber, Esq., P.C., have gone through this countless times before, and we are ready to go through it again to support you.
