The Mortgage Info Site.com
Bankruptcy is a lifechanging event. It is designed to give those who qualify for it a new
start in life from top to bottom. But as those who go through it know, there are alot of
questions about how you get your normal life going again. Things like rebuilding credit,
buying a home, and feeling like a success again are all intertwined, and are on many
people's minds soon after the bankruptcy is discharged.
The questions on many people's minds are as follows:
How long do I have to wait to buy a home?
How does this impact my interest rate?
How do lenders look at me now?
What do I need to do for a mortgage?
Who do I need to call to get a mortgage?
We will answer all these questions and more below; however, if you have any additional
questions, please send us a quick email and we can answer your question directly.
How long do I have to wait to buy a home or refinance my current loan?
Many people have heard that you need to wait two years or more to purchase a home or obtain a
mortgage after a bankruptcy. We have some good news for you. There are actually some
mortgage lenders that will loan you up to 100% financing (no money down) ONE DAY after your
bankruptcy has been discharged (Chapter 7 Bankruptcy) or if you are in a Chapter 13 Bankruptcy, if
you can show a 12 month on time mortgage or rental history, you may actually be able to obtain a
mortgage even sooner. Your best bet is to talk to a mortgage professional. There should not be
any application fee, and the mortgage professional should be able to steer you in the right direction
How do lenders look at me now?
The general impression people believe is that no banks or lenders will want to lend money to
someone who just had a bankruptcy, or the deal is going to be so bad it won't be worth it to get a
mortgage. This was the situation a few decades ago; however, over time lenders started to realize
something. Yes, as a potential client, there was a little additional risk lending to people with
bankruptcies; on the flip side, they realized that you, as a bankruptcy filer, had little or no debt. Most
people who have gone through a bankruptcy don't end up doing it again, and lenders hope that the
opportunity presented by your fresh start will protect their interest in your new home.
How does this impact my interest rate?
As you can guess, there will be a higher interest rate on your loans right after bankruptcy. The
lenders do have to balance their risk. The "normal" lenders, your local banks, credit unions, etc.
will most likely not offer you a loan this soon after bankruptcy. These lenders offer most of their
loan programs off the guidelines of Fannie Mae (FNMA) or Freddie Mac (FHLMC), which are private
corporations under federal oversight to provide fair lending for all borrowers. Their loan programs
do not allow for lending to clients with a recent bankruptcy.
Over the last 10 years or so, thousands of lenders have appeared across the country developing
more aggressive loan programs geared towards those borrowers who do not have good payment
histories, have bankruptcies, or even recent foreclosures. They balance the risk of the portfolio of
loans with more profit per loan, allowing all sorts of loans to be made.
The way to look at obtaining a mortgage now is to see it as a "band-aid" loan. It is a way for you to
obtain a mortgage now instead of having to wait years longer. As long as your equity situation, job
status, and credit improve over the next few years, you will be able to refinance to a better loan if
the rates stay favorable. You can obtain a FHA loan as little as 2 years after your bankruptcy has
been discharged. Conforming Conventional loans (Fannie Mae & Freddie Mac) are officially 4
years after bankruptcy, but due to the newer automated underwriting systems, some loans can be
approved even sooner.
Who do I need to call to get a mortgage?
Your loan options will probably be offered only by either a Mortgage Broker or a Sub-Prime
Mortgage Lender. You can learn about the differences between mortgage brokers and lenders by
clicking here. We would really recommend a Mortgage Broker, as they work with multiple
lenders, and can shop between not only loan programs, but the lenders themselves.
One important thing to know- You DO NOT want to work with any broker or lender. You want to
make sure you get someone who knows what they are doing when it comes to Bankruptcy or
Imperfect Credit. You can end up wasting months of your time and thousands of dollars if you
work with the wrong person. If you would like us to refer you to one, click here for our Refer Me a
Mortgage Pro Page. You will be given the information of a mortgage professional specializing in
imperfect credit loans.
What do I need to do for a mortgage?
Every loan scenario is different. For us to list every item you would need to address would take too
much time. Your best bet is to speak to a mortgage professional specializing in bankruptcy and
imperfect credit (see above).
The most important general information we can give you is to make sure you tell your mortgage
broker the full story- don't hold back on anything. Their job is to sift through everything you tell them
and find the best loan for you.
Had a Bankruptcy? Want a mortgage?
The Mortgage Info Site.com
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