If you experienced bankruptcy and foreclosure in recent years, it is possible to qualify for a loan in the future. There are certain criteria that you must adhere to. In this blog, we provide a basic understanding of how quickly you might qualify for a loan post- foreclosure and bankruptcy in Las Vegas.
Buying a Home Post- Foreclosure
A foreclosure coincides with an inability to make payments on a loan. Logically, you would not be in a position to buy a new home right away. Another mortgage company will not think that you can make payments on another loan. For conventional loans, there is a waiting period of 7 years for approval on another loan. FHA loans allow a lower 2-3 year wait period. There is also a special FHA Back to Work Program that requires only a one year time frame.
Keep in mind that this waiting period is only one of many underwriting approval criteria. During that period of time, it is critical that you demonstrate good credit practices. Examples are making prompt payments, not keeping high balances on your cards, not having any accounts sent to collections, etc. Most loan programs require minimum FICO scores for approval and the foreclosure surely brought down yours dramatically. Good credit practices will both substantiate your credit competence and increase your credit score.
Qualify For a Loan Post- Foreclosure and Bankruptcy
If you was taken in foreclosure AND you completed a bankruptcy, there are 2 separate waiting periods. Normally, the longer of the two applies. However, if the foreclosure was discharged in the bankruptcy (and the lender successfully confirms that), then you may use a shorter waiting period. For conventional loans, that translates to four years instead of seven.
Finding Out How Quickly You Might Qualify For A Loan Post- Foreclosure And Bankruptcy In Las Vegas
All of this may be somewhat confusing. Speak to a mortgage consultant to determine what actually applies to you. If you are past the wait period, the mortgage consultant can process a pre-approval. If you do not meet the requirements right now, he/she can recommend ways of improving your situation.
Meanwhile, at least you know that it is feasible to qualify for a loan despite going through a foreclosure and bankruptcy. Wait periods apply and can vary based on the loan program. Furthermore, there are certain programs that can shorten that timeframe. Qualifications and features will change over time, so your mortgage consultant is normally the best resource for the most update to date guidelines.