Watch-It Wednesday: How Do I Get A Mortgage After Bankruptcy?

Hello my friends! It’s Wednesday and that means one thing – it’s time for Watch-It Wednesday our weekly video blog! This week Jim Woodworth is back to talk to us about buying a home after bankruptcy. Can you qualify for a mortgage after you’ve filed for bankruptcy? Let’s find out:

If you can’t see the embedded video, watch our Mortgage Bankruptcy video here.

Got something to say? We’d love to hear from you! Email us at content@quickenloans.com and we just might feature your question or comments in an upcoming blog post!

Video Transcription:

Hi my name is Jim Woodworth, I’m a Mortgage Banker at Quicken Loans and I’m going to talk to you a little bit about applying for a mortgage after a bankruptcy. I get this question a lot and for the most part, after your bankruptcy is discharged you’ve got to prove yourself all over again. It’s imperative that you get some type of new credit established after the fact. Whether it’s a car loan, a bank loan, credit card, student loan – whatever it may be, it’s imperative that you show lenders going forward that you’ve done a good job of managing your credit. After the bankruptcy is discharged, in most cases you’d have to wait at least 2 years before you’d be able to get new financing for a mortgage – whether it’s purchasing or refinancing. In some limited cases we can get you approved after one year (FHA loans and Chapter 13 bankruptcy only). It depends on what kind of credit you have, what kind of payment history you have and how many pieces of credit you have – but generally speaking you’d have to wait at least 2 years. It’s imperative you get some kind of new credit established after the bankruptcy and the most important thing is you get your payments made on time after the bankruptcy. We’d love to talk to you about it specifically & everybody’s situation is a little bit different so we may be able to get one person approved and not the other so give us a call or find us online. You can find us online at www.quickenloans.com – we’d be happy to help.

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23 Responses to Watch-It Wednesday: How Do I Get A Mortgage After Bankruptcy?

  1. Danielle October 24, 2011 at 10:22 pm #

    You should add that if any real estate was involved, even if you kept it, that it is 3 years after a bankruptcy for quicken loans.

  2. Amber Hunt October 25, 2011 at 10:30 am #

    HI Danielle,

    Actually, we have to wait at least 2 years after the bankruptcy is discharged (in most scenarios). If the home was included in the bankruptcy, we cannot consider financing until three years after discharge. Each scenario is different, so it is possible that there was something unique about your situation that required us to wait three years. However, if you’d like us to check again, please let me know. Thanks!

  3. Peter Arthur January 25, 2012 at 12:51 pm #

    My circumstance is very unusual – some will say lucky. Forced into C 11 to protect equity in my home. C 11 dismissed June 2011. All creditors paid in full including interest and collection fees. Balance of cash assets exceed $1.0M. Debt – zero. Credit score June 2011 560. Credit score today 700.
    Still can’t get a mortgage! Any hope?

  4. Victoria Araj January 25, 2012 at 1:35 pm #

    Hi Peter, thanks for reaching out to Quicken Loans. We will have one of our home loan experts contact you shortly to learn more about your specific situation. Please let us know if we can be of any other assistance.

  5. PETER ARTHUR January 25, 2012 at 4:15 pm #

    THANKS VICTORIA

  6. jack May 24, 2012 at 7:39 am #

    i was told by the quicken loan guy it was 4 yrs after BK- after he knew it was only 3.5

  7. Shannon Martin May 25, 2012 at 8:45 am #

    Hi, Jack. I’ve passed your comment on to our Client Reltions team. Someone will be getting in touch with you shortly to help sort this out.
    Thanks for letting us know.
    Have a great weekend!

  8. Ida August 15, 2012 at 2:21 pm #

    I have read your comments on bankruptcy and have found the information very useful. My question is how long do I have to be with my new employer before I can apply for a loan?

  9. LaurelF November 13, 2012 at 4:19 pm #

    I agree with Danielle. It is a hidden ’3-year’ rule even if you retained your home and have sparkling credit now. Very disappointing to be mislead like this. The US Trustee doesn’t give you a choice of keeping your home out of bankruptcy or any other debt either. You can ‘reaffirm’ on it after but that still doesn’t keep it out of BK case. So I guess I want to know now if I go back and reaffirm on my mortgage if Quicken would consider me prior to 3 years post discharge. I already talked to a rep but this info was not offered.

  10. Victoria Araj November 14, 2012 at 12:19 pm #

    Hi Laurel, thanks for contacting us, one of our home loan experts will reach out to you with a few more questions to see if we can assist you. Thanks.

  11. jim west July 5, 2013 at 2:10 am #

    July 5,2013
    went through bankruptcy with no real estate involved 11 months ago. Now own a home that
    before deterioration listed at $80,000. I would like get a loan for 20,000 for repairs while I am living in it.

    My credit is not good–the places where I’ve applied say it is zero due to backruptcy. I continue
    to be employed full time where I’ve worked over 7 years. Some of my financial problems have
    been due to my Wife’s health.

    jw

  12. Victoria Araj July 5, 2013 at 9:56 am #

    Hi Jim, Thanks for telling us a bit about your situation. I have shared your inquiry with one of our home loan experts who will contact you to learn more and answer any questions you may have.

  13. Brandie July 27, 2013 at 3:26 am #

    Question,

    Me and my husband filled chpt 7 bk a little over a year ago, discharged July 2012
    We bought a van (bank loan) perfect payment history, July 2012 both me and my husband have credit cards with over 6 month on time payment history, all our bills we pay on time.
    We’re really wanting to purchase a home
    My husband was with his employer 12 years before he was offered this new amazing job with a new company. Witch he started end of June 2013.
    Is it a strict 2 year after bk policy? Or could we atleast get pre approved now? What we want to do is buy a home in our neighborhood, in fact the home we have our eyes on will be listed in a year the family plans to re locate in about 2 years but putting home on market in year. We would love to talk with them and see about purchasing this home in a year however we would like to find out what our pre approval may be? Hope this makes sense.
    Thanks

  14. Brandie July 27, 2013 at 3:27 am #

    Our bankruptcy was not loans and credit cards debt. It was 90% MEDICAL debt.

  15. jeff sutherland November 24, 2013 at 10:57 am #

    trying to go va will be 2 years post chapter 7 on jan 23rd 2014 was already denied by quicken because I am not 2 years post bk. it was never said to me to reapply when I am 2 years post bk although I will be eligible at that time. I had according to quicken 674 x2 and a 698 Isaac. I would truly like to go through quicken to purchase my home but have no idea if a reapp would even be worth it!

  16. Keith Guyot November 25, 2013 at 5:48 pm #

    Hi Jeff! First off, thank you very much for your service to this country. We’ve forwarded your comment to our VA Home Loan Experts who should be in touch with you soon.

    Thanks for reading!

  17. Bob December 7, 2013 at 9:50 am #

    I owned an LLC business and during the 2008-2009 economic depression. I had to downsize and break two substantial lease agreements and discontinued paying 2 corporate business credit cards totaling 17K. The 2 landlords pursued legal action against both the company and myself in excess of 4 million dollars. Even though I did not have personal guarantees they we’re able to pursue me personally. Neither party was willing the negotiate a fair settlement, consequently I decided to file chapter 7. They sued within the bankruptcy. In both cases the plaintiffs decided to negotiate days before going to trail. I settled one case for $4000 and the other $8000. The bottom line is my personal credit was in the mid 700′s for 35 years. I’ve always paid my personal bills, credit cards car loans and mortgage on time. My wife is a professional who makes a substantial salary, I was able to savage tools of the trade and rebuild the company with the support of a partner. I am now an employee of the company with an employment agreement that entitles me to 50% of the profitability of the company and am compensated in excess of 6 figures. Also, I was able to pay off our 3 kids college loans prior to bankruptcy. My wife did not file bankruptcy and all our assets were in her name. I was able to get a credit card with $3,000 credit line and have a substantial amount of money in the bank. We are now in the process of buying a new home and I am being told that my wife should get the mortgage in her name only due to my recent business bankruptcy.

    MY QUESTION: Is my situation one in which a lender would consider unique? And if not and we bought the house under my wife’s name (and even though I can be put my name on the deed) what would happen is she had the mortgage and something terrible was to happen. Would the bank call the loan in. We are pretty flush with capital and absolutely no debt….I’ve been living life on a cash basis and while my ego is tarnished I am concerned about longer term implications more so than today. Any thought?

  18. Keith Guyot December 9, 2013 at 12:46 pm #

    Hey Bob,

    Because you do have a unique situation, I’ve forwarded your questions and concerns to our Home Loan Experts to give you the best answer we can.

    Thanks for reading!

  19. jeffrey sutherland April 11, 2014 at 9:31 am #

    even after trying to go with quicken a second time and stating that I wanted to go VA no money down…quicken insisted I would have to put 10% down. I ended up being approved by Michigan Mutual @ 4.25% 1/4% lower than Quickens rate with no money down! taking into consideration that I was working with someone in the presidents office, I have never seen a more shameless company in my life. I will never and could never suggest anyone to go with quicken….the only thing that was engineered to amaze was the lack of respect your employees have for clients!

  20. Keri Scott April 14, 2014 at 12:30 pm #

    Our Chapter 7 bankruptcy over 5 years ago in 2/2009. Our home was foreclosed on by the bank until 1/2012. It was not sold to a new owner until 4/2012. We have re-established our credit to a 690-715 score. Have we met the requirements for waiting the 2 or 3 years to apply for a new mortgage? I thought the waiting period did not begin until after the bank then transfers the home to a new buyer but I may be mistaken. If we are once again eligible we are ready to purchase. We could be eligible for an FHA loan due to our location and VA loans. Any input about the timeline would be greatly appreciated.

  21. Keri Scott April 14, 2014 at 12:38 pm #

    *^^Sorry…..our Chapter 7 bankruptcy was discharged over 5 years ago.

  22. Victoria Araj April 14, 2014 at 1:40 pm #

    Hi Keri, thanks for reaching out to us. We will have one of our home loan experts contact you. Thanks!

  23. Victoria Araj April 14, 2014 at 1:45 pm #

    Hi Jeffrey, I’m sorry to hear about your experience, I have forwarded your comments to the appropriate team and they will contact you to find out more. Thank you for your feedback.

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