How Long Does It Take After Bankruptcy to Get a Mortgage Loan?
Mortgage loans immediately after bankruptcy are available but they're usually high-cost.
Bankruptcy and Credit
Bankruptcy can have a sometimes severe impact on your credit score depending on how high it was when you filed for bankruptcy. Though the drop in score varies, it's not unusual for credit scores to decline by 100 to 200 points due to bankruptcy. Your overall credit profile, including your credit score, is an important factor when it comes to mortgage lending. If you've just emerged from bankruptcy, expect a minimum of 24 months before you can qualify for most mortgage loan programs.
Bankruptcy and Mortgage Loans
According to the Realtor.com website, mortgage loans may be available sooner than 24 months after bankruptcy, but they usually feature higher interest rates. If you want a mortgage loan with favorable rates after bankruptcy,
spend at least 24 months properly preparing for one. After a bankruptcy it's vital to make payments on any remaining or new debt on time. If you closely monitor your post-bankruptcy credit history and score you should eventually be able to qualify for various mortgage programs featuring reasonable terms.
FHA Mortgage Loan Programs
Borrowers are generally eligible for loans insured by the Federal Housing Administration about two years after their bankruptcies are discharged. FHA loans can require low down payments of about 3.5 percent, and a credit score of as little as 500, but lenders make the final approval decision on any FHA-insured loans they extend and they may require credit scores exceeding 580 or higher. The downside to an FHA mortgage is that it includes a mortgage insurance premium that increases its monthly payment.
Conventional Mortgage LoansSource: homeguides.sfgate.com