Qualify for a Mortgage Post-Foreclosure and Bankruptcy

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If you once went through a bankruptcy and foreclosure, it is possible to qualify for a mortgage in the future. There are important requirements that you must know about. Below, we provide a basic understanding of how soon you might qualify for a mortgage post-foreclosure and bankruptcy.

Home Buying Ability Post-Foreclosure

A foreclosure relates to defaulting on a mortgage. Logically, you would not be able to directly purchase another piece of real estate. Another mortgage company will not believe that you will stay current on another mortgage. For conventional mortgages, there is a waiting period of seven years (from the foreclosure date) before you can be granted another mortgage. FHA mortgages allow a lower 2-3 year waiting period. There is also a special FHA Back to Work Program with only a one year wait period.

Keep in mind that this time frame is merely one of several mortgage requirements. During the wait timeframe, it is critical that you take actions to increase your FICO rating. Examples are making payments on time, not carrying high balances on your cards, not having any accounts sent to collections, etc. Most mortgage companies require minimum FICO scores for loan approval and the foreclosure probably reduced your score dramatically. These will both confirm your ability to fulfill the terms of credit granted and raise your score.

Qualify For A Mortgage Post-Foreclosure and Bankruptcy

If your house was foreclosed AND you have a discharged bankruptcy, there are two applicable waiting periods. Normally, the longer of the two applies. However, if the foreclosure was included in the bankruptcy (and the mortgage company successfully verifies that), then you can have a shorter waiting period. For conventional mortgages, the shorter timeframe is four years (instead of 7).

Finding Out How Soon You Might Qualify For A Mortgage Post-Foreclosure And Bankruptcy

All of this can be somewhat confusing. Contact a mortgage loan officer to figure out which category you fall into. If you are past the waiting period, the mortgage loan officer will get the paperwork required for a pre-approval. If you do not qualify right now, he/she may provide advice on repairing your credit.

The important thing to know right now is that it is feasible to qualify for a mortgage even though you have experienced foreclosure and bankruptcy. Wait periods apply and may vary depending on the loan program. There are also certain programs that can shorten that wait period. Criteria and features do change over time, so your mortgage loan officer is always your best reference for the most update to date information.