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Question By
boonpieadams

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How long must I wait to get a new mortgage loan after a chapter 13 has been filed?
How long must I wait to get a new mortgage loan after a chapter 13 has been filed? I have a credit score now of just under 700. I am in my 33rd month of a 60 month repayment plan. I have missed no payments and intend not to. I am fully employed and have been for over 13 years with the same employer. I have a mortgage now and have never missed a payment and I would like to sell and relocate after the 60 months is completed. Any advice/ information would be greatly appreciated. Thank you very much for your time and understanding with this difficult situation.
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There are restrictions...

Helpful to 3 out of 3 people

There are restrictions on applying for a mortgage while you are in Chapter 13:

  • You can obtain an FHA or VA loan during a Chapter 13 bankruptcy as long as you have made 12 months of Chapter 13 plan payments and the bankruptcy court approves the loan. If you don't have a satisfactory payment record, you may have to wait for a year after discharge.
     
  • You can obtain an USDA loan during a Chapter 13 bankruptcy as long as you have made 12 months of Chapter 13 plan payments and the bankruptcy court approves the loan OR 1 year after discharge.

     

  • You can obtain an Conventional loan 2 years after discharge.  If your case was dismissed without a discharge, you must wait 4 years after dismissal.

For a FHA loan or a VA loan, you will be required to provide an explanation of the bankruptcy.

...

Once these time periods have passed, anyone will then be able to apply for a mortgage, but you must still qualify for the mortgage loan.  That may be the toughest part after a bankruptcy.  Talk to your banker or mortgage broker to get a line on the best options for your specific situation.

Good luck and let us know how it works out!

Reply by
boonpieadams

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Helpful to 1 out of 1 people

Thank you for your reply.  I have since posting my question, found this same information and it is correct.  It seems for a conventional loan, the waiting period is two years after dscharge. 

On a good note:  I was able to increase my score, which is now 711...

Full steam ahead.

thanks again..

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That really depends on the lender

Helpful to 1 out of 2 people

and weather they are willing to take the risk.  If your score rise another 20+ points or so you should be able to qualify, Depends on how much that bankruptcy is holding down your score. 

You may be able to qualify sooner with your current lender since you say you have a good history with them.

Good luck

Reply by
boonpieadams

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Thank you for your responce. 

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I say now!

According to your question, you asked AFTER the 60 months. Unless you compiled a lot of new debt, you are set to begin again. Wish I was in good of shape as you.

Get and study your Free Credit Report, then talk to your current bank. They already have your loan, they can not turn you down. Besides that, they are your neighbors and friends, and believe it or not, they care.

Ask questions. Ask if they are located where you want to relocate. Ask if you sell your current home, will they refinance a new home for you. Your bank can do a soft pull of your credit report and give you a very good idea of what you can do. They are not your enemies.

Think of this, about 60% of the Fortune 500 companies in the US have filed for bankruptcy one time or another. You are not alone.

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Helpful to 1 out of 2 people

they may require you to pay off all outstanding debts first as its restructuring rather then the one you walk away owing nothing.. either way you might want wait as your rate isnt going to be cheap even if you are approved..

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