Buying a House After Bankruptcy

Recovering after a bankruptcy is not something that occurs quickly. Many individuals who declare bankruptcy have questions about how long it will take before they will be able to purchase a home. In many cases, the type of loan that a person requires for a house and how the person handles credit after their declaration of bankruptcy influences this process. Mortgage companies offer different “seasoning periods” after a person declares bankruptcy. Lenders might also have additional requirements about the length of time a person must wait after declaring bankruptcy. While some individuals struggle to recover after declaring bankruptcy, other individuals discover that they are able to buy a house within few years. If you are interested in buying a house, it is important to increase your credit profile and sometimes even obtain the assistance of a skilled attorney. This article will list some of the various factors that can influence the amount of time that a person can expect it will take to obtain a loan to purchase a house after declaring bankruptcy.

Factor #1: Whether a Person Declares Chapter 7 or Chapter 13 Bankruptcy

Whether a person declares Chapter 7 or Chapter 13 bankruptcy will also determine how long this process takes. In the case of chapter 7 bankruptcies, the seasoning period involved commences when the action is discharged. At this point, a person can often expect to wait four years for conventional loans and two years for either FHA or VA financing. Chapter 13 bankruptcies are slightly different and in many cases a person is able to obtain a conventional loan two years after a bankruptcy discharge while individuals who use FHA or VA financing might even wait a shorter amount of time.

Factor #2: Foreclosure and the Length of Bankruptcy

Individuals who lose their homes to foreclosure prior to bankruptcy can expect to face a longer wait time. While many individuals who lose homes to foreclosure can expect to wait seven years after declaring bankruptcy, individuals who are able to show that a foreclosure occurred in extraordinary circumstances are sometimes able to obtain homes after three years. Short sales and deeds in lieu of foreclosure can also result in the amount of time in which one can obtain a house to be extended. After these actions, individuals can expect to wait four years, but a person who can demonstrate extenuating circumstances can often obtain a home in a shorter amount of times. While a bankruptcy or foreclosure certainly adds the amount of time it takes for a person to obtain a loan for a house, it is often still possible to obtain a home even if a person declares bankruptcy.

Obtain the Assistance of a Skilled Oklahoma Bankruptcy Attorney

Because there are many unique factors that can be involved in an individual’s bankruptcy case, there is no universal answer to how long it will take to obtain a loan to purchase a home after declaring bankruptcy. As a result, if you require assistance obtaining a home after declaring bankruptcy, you should obtain the assistance of a skilled attorney. Do not hesitate to contact seasoned legal counsel like Jim A. Lyon.