Many people believe that filing bankruptcy is the end of the road for getting a credit card ever again, let alone being approved for a mortgage. But, actually it is a new beginning. Owning a home is still possible for Ohio residents after filing for bankruptcy, or even after a previous foreclosure.
After the recent foreclosure crisis affected so many people who lost their homes to creditors, the idea that someone who just lost their home to foreclosure can turn around and buy another house within a short period of time might seem to defy logic. But, many factors come into play. What were the reasons for the foreclosure? Was the homeowner a victim of the economy or a lender’s wrongdoing? What types of financing are now available to the buyer?
In reality, some debtors can qualify for a mortgage in as little as two years after a foreclosure or bankruptcy filing. In fact, the foreclosure crisis itself has helped ease the criteria for approving new mortgages. The downturn in the economy has caused some lenders to loosen certain standards.
Each mortgage lender will have its own rules. But for government-backed loans like FHA and VA mortgages, the wait is now two to four years after filing Chapter 7 bankruptcy. These loans can also be approved with a smaller down payment than a conventional loan, which generally requires a 10 to 20 percent down payment. FHA loans now require a 3.5 percent down payment. USDA and VA loans may require no down payment.
After struggling through a difficult economy, many people have difficulties regaining their footing. If they had to go through a foreclosure or filed bankruptcy to stay afloat financially, they can start to rebuild their lives, even in a new home. If you have waited to file bankruptcy due to fears of not being able to get credit again for small items or for more expensive items like a car or home, an experienced bankruptcy attorney may provide you with guidance. Rather than being a last resort, bankruptcy may be the best option for you to get back on the road to a stable financial future.
Source: Star News Online, “Homeowner dream still achievable after foreclosure,” Wayne Faulkner, March 7, 2014