One of the biggest things that people worry about when they are considering filing for bankruptcy is whether they will be able to buy a house. Some may want to buy a house soon, so the prospect of having to wait years and years seems daunting. Others just don’t understand bankruptcy fully, and they think that they’ll never be able to buy a house again and that their credit will be permanently ruined.
It’s important that you understand the truth about how bankruptcy will influence your ability to buy a home so that you can make the appropriate decision for your finances. A bankruptcy attorney can help you understand the ins and outs of bankruptcy and how filing may help or hurt your finances and your credit, so it’s important that you schedule a consultation at a bankruptcy law office in Gilbert before you make any decisions.
Federal Housing Authority Loans
The Federal Housing Authority, or FHA, provides many of the home loans that offer the best interest rates and terms. Most people usually have FHA loans in mind when they are thinking about how bankruptcy will affect their ability to get a home loan.
Whatever type of loan you apply for, your ability to be approved will depend on your specific circumstances. However, most people who file for Chapter 7 bankruptcy will have to wait two to three years after their discharge to be approved for an FHA home loan. Those who file for Gilbert Chapter 13 bankruptcy will typically have to wait less time to get approved. That’s because Chapter 13 bankruptcy reorganizes debt rather than discharging it, so those who file earn a bit of goodwill by continuing to pay down their debt. However, the bankruptcy trustee will have to weigh in on your ability to take on more debt if you apply for a home loan during the repayment period.
Veterans Administration Loans
The Veterans Administration, or VA, offers home loans for those who are military veterans or who are eligible family members. Typically, the requirements to get a VA loan are less stringent than for other types of home loans, which is an intentional benefit for service members.
Those who filed for Gilbert Chapter 7 bankruptcy can expect to be approved for a VA loan two years after discharge. They will still have to explain why they had to file bankruptcy and explain how they have rebuilt their credit since the discharge. Those who filed for Chapter 13 bankruptcy can get approved for a VA loan after just one year of making timely debt payments. Just like with other loans, the bankruptcy court will play a role in determining whether you can get a new loan.
Many other agencies provide home loans with reasonable interest rates and terms, including Fannie Mae and Freddie Mac. These loans are also insured.
Because conventional loans offer such good terms, they can be harder for those who have filed for bankruptcy to get. The typical waiting period after a Chapter 7 filing is four years. However, you could reduce the time if you show that your bankruptcy was caused by extenuating circumstances, such as unexpected medical bills. The typical waiting period after a Chapter 13 filing is two years.
You have a lot of options for qualifying for a reasonable home loan after filing for bankruptcy, so you need not fret about your ability to buy a house and rebuild your life after seeking debt relief. The best thing you can do after your bankruptcy is discharged is to make smart financial choices, including paying all your bills on time and keeping your credit low. Live within your means, and save as much as you can to deal with emergencies when they arise. You’ll restore your credit more quickly, which means that you’ll also qualify for a home loan more quickly.
If you are struggling with debt and aren’t sure what to do, call Gilbert Bankruptcy Lawyers to learn about the benefits that bankruptcy can offer you. A bankruptcy attorney from our team will review your finances and help you understand the pros and cons of Chapter 7 and Chapter 13 bankruptcy for your circumstances. Our goal is to help you get debt relief quickly so that you can start getting your finances back on track. https://gilbertbankruptcylawyers.com/schedule-an-appointment/ today to talk to a bankruptcy lawyer about your options!
Gilbert Bankruptcy Lawyers