Good Morning DINKS. Thanks to our good friends at Credit Karma today we are discussing losing our home and finding a new home afterwards. Many of us have experienced some form of financial hardship over the last few years such as losing our job, taking a pay cut, or a decline in the value of our investment and retirement portfolios. Unfortunately some of us (and admittedly more than I would like to know of) have experienced extreme financial hardships because some of us experienced losing our home.
Losing our home can be devastating both personally and financially, but what’s important is that we do what we have to do to clean up our past and then we move into our future with hopes of making it better. One of the biggest questions that people ask when they lose their home is how long they have to wait to apply for another mortgage loan after declaring bankruptcy, foreclosing on a previous home, or having a short sale on your home.
Applying for a Mortgage Loan
There can be a lot of confusion surrounding when you can apply for a mortgage loan after a bankruptcy, foreclosure or a short sale. The quick guide below was supplied by Credit karma with information from iLoan.com. We can use the guide to help us answer any questions that we may have about applying for a mortgage loan after experiencing personal financial hardships.
Applying for a mortgage loan and being approved for a mortgage loan are two different things. Just because you are able to apply for a mortgage loan doesn’t necessarily mean that you will automatically be approved. Being approved for a mortgage loan depends on many factors such as your personal income, the amount of your savings, as well as your ability to repay the new mortgage loan. You have to take the necessary steps towards improving your personal finances, and being informed on the process of applying for a new mortgage loan after a bankruptcy, short sale, or foreclosure is a great first step.
Applying for a Mortgage Loan After a Bankruptcy
If you filed a Chapter 7 Bankruptcy you will have to wait 4 years from the discharge date if you are applying for a conventional mortgage or for a mortgage with Fannie Mae. However if you have filed several Chapter 7 Bankruptcies in the past 7 years you will have to wait at least 5 years to apply for a new mortgage loan. If you file a Chapter 7 Bankruptcy and you are applying for a mortgage loan with FHA you must wait at least 2 years from the discharge date.
If you Foreclosed on your previous home you will have to wait 5 years before applying for a new conventional mortgage loan. You will have to wait for 7 years before applying for a new mortgage loan with Fannie Mae and 3 years from the completion date of your foreclosure if you are applying for a new mortgage loan through FHA.
If you have to wait five years after financial hardships before you can apply for another mortgage loan then you have five years to get your finances in order. Check the info graph below for details on how long you have to wait to apply for another mortgage loan after filing for bankruptcy, a short sale, or a foreclosure.