Can I Get a Mortgage After a Bankruptcy?
Yes. No. Maybe. It depends.
You can guess that in this day and age there are far more bankruptcies we must contend with as lenders than in times past. It used to be that maybe 1 out of 50 applicants had filed bankruptcy but it is now closer to 1 in 10. Some days it is 1 in 1 – like today. Fortunately for you this has inspired a post so if you are in this situation and found this article by searching on the terms “how does bankruptcy affect my ability to borrow” or “can I get a home loan after bankruptcy” this should help. Please keep in mind that lending guidelines change regularly and, unless otherwise noted, this is information for conventional home loans in September of 2011. Call me or contact me for updated information or more specific answers.
Borrowing may be possible depending on a few things:
- How long since the discharge date
- What caused the bankruptcy – financial mismanagement or extenuating circumstances
- No negative credit impact since the discharge date
- Was there a foreclosure/short sale/deed in lieu in the bankruptcy
- What type of loan are you applying for (conventional, government, non-conventional)
- What Loan To Value (LTV) are you seeking
If you are looking for an FHA loan with 3.5% down and it has been three years since your foreclosure and you have not had any negative events on your credit and you otherwise qualify you should be able to achieve financing without further factors. Fannie Mae wants to know what happened to cause the bankruptcy and they want you to have waited 48 months from the discharge date for both 7 and 13.
While FHA will allow 3 years from foreclosure FNMA is stricter and looks for 5 to 7 years and still needs a minimum of 10% down and can be used for primary residence only.
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How do I find out if Fannie Mae owns my loan?
One of my most frequently asked questions is “How do I find out if I have a Fannie Mae home loan?”
The Fannie Mae DU Refi Plus has made it ever more important to know if your existing loan is a Fannie Mae loan. To find out who owns your loan you simply need to go to the Fannie Mae website and check using your address. You will need to tick a checkbox indicating you are the owner of the property or have authorization to check on behalf of the owner.
Mortgage answers should be delivered only by licensed mortgage professionals. Your agent should serve in the transaction and transference of the property and not be relied upon for accurate mortgage information. Experienced, license mortgage professionals spend hundreds of hours every year in training, compliance updates, and working with clients similar to you with resolving their mortgage needs. Nothing against agents and the smartest ones will tell you, “ask your mortgage professional”. To see if they are licensed simply go to the NMLS Custom Access site.
I am a multi-year veteran of the industry who has served in the highest offices in the industry. I can help you get the best deals and avoid getting ripped off!
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What is a streamline mortgage?
Regardless of the industry there are certain buzzwords or words that seem like they are created simply to confuse the outsider. Near the bottom of the list for business goals should be confusing customers. Unfortunately it does happen and the one who stands the highest chance for damage is the most valuable of all; the customer.
Mortgage professionals throw around terms like an alphabet soup that would frighten even Vanna White. Words like ten oh three (1003) and respa (RESPA – Real Estate Settlement and Procedures Act) fall out of their mouths like jelly beans out of a pinata.
Making it even a little more confusing for you different agencies use the same term to apply to different meanings and vice versa. Streamline and streamlined for example.
The Federal Housing Administration (FHA) makes available a couple of different “streamline” loans. Freddie Mac (FHLMC) has their “streamlined” loan. Essentially they are the same product and if you phone an FHA lender and ask for a “streamlined” loan they will neither laugh at you nor hang up on you.
For all practical purposes streamline loans, whether a streamline refinance or otherwise, indicate something less is required or they go faster than a standard loan. For the FHA streamline refinance a little less documentation is required and sometimes less evidence of value is required.
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