Wait Period for Home Loan Eligibility After Bankruptcy

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When can you qualify for an AZ mortgage and purchase a home after a bankruptcy?  A very popular question for clients that have a bk in their rear view mirror.  Let’s jump right in and help you figure out how soon you can get off the sidelines and become a proud new Phoenix area homeowner once again!

How Time Ticks after a Bankruptcy

The mortgage clock starts on a bankruptcy’s discharge date.   This stands for both chapter 7 bankruptcy and a chapter 13 bankruptcy  Lenders do NOT use the bankruptcy filing date.  This is a very important.   After-all, bankruptcy discharge and bankruptcy filing dates are typically months apart.  Phoenix area mortgage lenders concern themselves with the time elapsed since the discharge date.

How long do you have to wait to qualify after a bk is a question that has multiple answers.  3 facts dictate how long the post bk wait is:

  1. Bankruptcy discharge date
  2. Type of bankruptcy (chapter 7 or chapter 13)
  3. Home loan type applied for

Post Bankruptcy Home Loan Wait Times 

While exceptions exist, the standard post bankruptcy wait periods are as follows:

Conventional Mortgage 

  • Chapter 13:  2 years
  • Chapter 7:  4 years

FHA Mortgage

  • Chapter 13:  1 year
  • Chapter 7:  2 years

VA Mortgage 

  • Chapter 13:  1 year
  • Chapter 7:  1-2 years

In addition to standard post bk wait periods, exceptions exist for shorter wait periods.   Shorter than standard wait periods require a full underwriting review and revolve around whether or not “extenuating circumstances” caused the bankruptcy.

By Jeremy House
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