How to Buy a Home After Filing for Bankruptcy
You might have heard the common myth that it is impossible, or nearly impossible, to buy a home and to obtain a mortgage after you have filed for bankruptcy. This is a myth, and many Florida residents successfully obtain mortgages and buy homes after bankruptcy cases. For many of those Floridians, the wait times are also much shorter than you might think. The waiting times for applying for a mortgage after bankruptcy will depend on both the type of bankruptcy filing as well as the type of mortgage you are seeking, but it is important to keep in mind that buying a home after bankruptcy is indeed possible. Our West Palm Beach bankruptcy lawyers can explain in more detail below, and we are here to answer any questions you have today about getting a mortgage after a bankruptcy filing.
Chapter 7 Bankruptcy Waiting Periods for Home Loans
If you file for Chapter 7 bankruptcy (a type of liquidation bankruptcy), you will have a two-year waiting period from the date your bankruptcy case was dismissed or you received a discharge for a VA home loan or an FHA home loan. If you want to obtain a conventional mortgage, you will need to wait four years from the date of dismissal or discharge.
For individuals who exempted all of the equity in their home with Florida’s homestead exemption and want to apply for a home equity loan after bankruptcy, you will need to wait four years from the date of dismissal or discharge.
Chapter 13 Bankruptcy Waiting Periods for Home Loans
When individuals file for reorganization bankruptcy, they usually file for Chapter 13 bankruptcy. In order to be eligible for a VA or FHA home loan, you must have completed the terms of your bankruptcy reorganization plan and received a discharge, or your bankruptcy case must have been dismissed, before you can obtain one of these types of loans. For a conventional mortgage, you must have received a discharge at least two years prior, and the same is true if you are seeking a home equity loan.
Chapter 11 Bankruptcy Waiting Periods for Home Loans
Typically, an individual will only file for Chapter 11 bankruptcy if they do not qualify for Chapter 13 bankruptcy based on the latter’s debt threshold limit since Chapter 11 is more complex and expensive than Chapter 13 bankruptcy in general. However, if you do file for Chapter 11 bankruptcy as an individual, you can be eligible for a VA or FHA loan two years after your bankruptcy discharge or dismissal. The waiting period is four years after a discharge or dismissal for a conventional mortgage, and the same for a home equity loan.
Contact Our West Palm Beach Bankruptcy Attorneys Today
Many people worry that they will not be able to buy a home after filing for bankruptcy, but it is often much easier to obtain a mortgage after a bankruptcy filing than many people assume. Whether you have questions about how a possible bankruptcy filing will impact your ability to buy a home, or you want to find out more about bankruptcy options that can make it easiest to buy a home, you should seek advice from an experienced West Palm Beach bankruptcy lawyer at Kelley, Fulton, Kaplan & Eller. Contact our firm today to learn more about how we can assist you.
Sources:
hud.gov/helping-americans/loans
benefits.va.gov/homeloans/
