How Long Do You Have to Wait to Buy A Home After Bankruptcy/Short Sale/Foreclosure?

The answer may be different with different lenders but this is the guideline we use:

 

Chapter7

Chapter 13

Short Sales or Deed-In-Lieu

Foreclosure

Conventional

4 years from discharge date

4 years from discharge date

2 years 80% LTV 4 years 90% LTV 7 years above 90% LTV

7 years

FHA

2 years from discharge date

12 months acceptable payment history & court approval

3 years

3 years

USDA

3 years

3 years

3 years

3 years

VA

2 years from discharge date

12 months acceptable payment history & court approval

2 years

2-3 years

Jolene.Messmer@CobaltMortgage.com | www.JoleneMessmer.com

If you’ve had some issues with your credit due to the above scenarios, it will take some time before you can jump back in the housing market.  There also may be exceptions to these rules/guidelines, and you should check with your lender.

I do believe owning a home is still a great investment.  When I work with home buyers, I explain to them that a home is a place you live first and an investment vehicle second.  Homes are going to appreciate in value OVER TIME.

You have to live somewhere and pay either rent or mortgage.  With the prices and interest rates being as low as they are, if you can buy a home—and WANT to buy a home—maybe it's your time to buy a home.

There may be different loan programs out there, but a good rule is you need at least a 620 FICO score to qualify for a mortgage loan here is the greater Seattle area.  There are very few programs available to people with credit scores between 580 and 619, and there will be documentation required from the borrower to mitigate why the credit score is so low.

During the housing boom, not many people used FHA or VA loans as 100% conventional loans were widely available. Now with the credit crisis and the bust, folks are using FHA and VA loans more frequently.  I've also had clients use the USDA loan program in the last few years. 

Whatever your situation is, be patient and eventually you may own the home you love!

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Debra Hamilton helps Seattle real estate clients find homes for sale in Seattle and surrounding communities.