Mortgage Loan Options After Bankruptcy in Kentucky
In some cases, you have exhausted your emergency fund, and have decided there is no option other than to file for bankruptcy to pay off your debt. You may decide to work with a bankruptcy attorney. Plus, you should know all real estate agents and mortgage lenders who have experience working with people with bankruptcy on their credit score.
When you declare bankruptcy, you may find it hard to improve your credit score and financial condition. Even worse, you may think you will never be able to buy a house again, but the reality is different.
Who wants bankruptcy? Of course, no one wants to fall into this drastic situation. But people dealing with financial troubles may think it is the only way to get out of debts and start from the beginning.
However, bankruptcy may minimize financial stress and allow you to focus on making positive financial decisions for your future. So are you ready to move forward and make your dream of owning a home come true? So, adopt the following strategies to achieve the goal.
How Long after a Bankruptcy Can I Qualify for a Kentucky Mortgage?
You can buy a house approximately one or two years after filing for bankruptcy, only if you restore your credit and avoid new debt. Filing a Chapter 7 or Chapter 13 bankruptcy will impact your credit report and put a negative score on your credit. But it does not mean that you cannot buy your own house.
Chapter 7 Bankruptcy
The standard type of bankruptcy is Chapter 7, in which the court wipes down your qualifying debts. In this case, your credit score is affected. If you file Chapter 7 bankruptcy, you have to wait for about four years after the court dismisses your bankruptcy to make you eligible for a conventional loan.
However, government-backed mortgage loans are more complex. You have to wait for about three years after your bankruptcies' dismissal to qualify for a USDA loan. At the same time, you have to wait for about two years in order to qualify for a VA or FHA loan.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy involves the restructuring of your debts. That means you have to make scheduled payments to your creditors. It does not have a substantial effect on your credit score. Moreover, you can keep your assets as well. While regulations for chapter 13 are less severe than Chapter 7, these loans also have a waiting period.
Conventional loans after chapter 13 bankruptcy usually require a waiting period depending on the court’s choice to handle your bankruptcy. Generally, the waiting period is about four years from the date you file bankruptcy and two years from your dismissal date.
While chapter 7 bankruptcy standards are relaxed for government-backed loans, USDA loans have a 1-year waiting period after filing for Chapter 13 bankruptcy. FHA and VA loans need a court to dismiss or discharge approval of your loan before your apply. However, the waiting period remains the same in both cases, whether dismissal or discharge.
How Long after a Kentucky Bankruptcy Can I Qualify for a Mortgage Loan in Kentucky?
There are bankruptcy lenders who can help with your mortgage application even just one day out of chapter 7 or chapter 13 bankruptcy. You will likely need a larger down payment and show that you are taking financial steps to improve your credit.
Below, we will take you through some mortgage after bankruptcy options and then connect you with some of the best bankruptcy lenders. We understand that you area dealing with a lot and having a bankruptcy is not easy. Let us help guide you through this process.
| Type of Loan | Chapter 7 | Chapter 13 |
| Conventional | 4 years | 2 years |
| FHA | 2 years | 1 year |
| VA | 2 years | 1 year |
| USDA | 3 years | 1 year |
* Mortgage after bankruptcy waiting period chart
Kentucky Mortgage after Bankruptcy Waiting Period
Every type of loan has different waiting period requirements. Here are some of the basics:
- Kentucky VA Loans after bankruptcy– 2 year waiting period
- Kentucky FHA Loans after bankruptcy – 2 year waiting period
- Kentucky USDA Loans after bankruptcy – 3 year waiting period
- Conventional mortgages after bankruptcy – 4 year waiting period after chapter 7 and 2 years after chapter 13
- Non-QM Subprime Mortgages – Available just one day out of bankruptcy.
Depending upon your scenario, we can find a mortgage for you just ONE DAY after your bankruptcy has been discharged. The rules for applying for a mortgage is the same regardless as to whether you filed a chapter 7 bankruptcy or chapter 13 bankruptcy.
Joel Lobb Mortgage Loan Officer
American Mortgage Solutions, Inc.
10602 Timberwood Circle
Louisville, KY 40223
Company NMLS ID #1364
Text/call: 502-905-3708
email: kentuckyloan@gmail.com
http://www.mylouisvillekentuckymortgage.com/
