Hello my friends! It’s Wednesday and that means one thing – it’s time for Watch-It Wednesday our weekly video blog!

If you’ve been through a bankruptcy, can you still get a mortgage? The short answer is yes, with restrictions. Home Loan Expert Jim Woodworth lays out the details in the video below. This post has more information on how different bankruptcy options affect your mortgage eligibility. If you like what you hear and you’re ready, go ahead and apply for a mortgage here.

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.

If you have any questions, leave us a note in the comments.

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This Post Has 70 Comments

  1. Will be a year after chapter 13 discharge in April. The trouble I am finding is that I really want to refinance our mortgage since our rate is 11% however our last appraisal was only for 80k 4but our payoff is $84k and companies are not able to refinance our mortgage without us bringing $6k to closing. What do you suggest we do?

    1. Hi Laura:

      You’ll be able to do an FHA loan in April. I’m going to pass this on to someone and see if there’s any way we can help you.

      Thanks,
      Kevin Graham

  2. Hello I’ve have been discharged out of my chapter 13 for little over 8 months me and my wife have good jobs and we are paying bills on time we are renting right now and it’s way too high we have been looking at some house are they any thing that we can do to get started now

    1. Hi Tracey:

      If you’re eligible for a VA loan, you could apply right now. Otherwise, you can get an FHA loan after a year.

      Thanks,
      Kevin Graham

  3. I am 2 years into my bankruptcy and I have 3 years left (all payments on time) and my house was recently foreclosed on in December of 2015 because I started a deed in lieu of foreclosure and they thought they would make money on the sale so they went ahead and foreclosed. We are renting for $1750 a month and never have been late and I know we could afford a mortgage versus paying this much money for someone else’s problem. My husband (not included in the bankruptcy) and I are saving up to buy a house but is this at all possible?

    1. The ability to get a mortgage is very limited if the bankruptcy hasn’t been discharged yet. However, I’m going to have a Home Loan Expert reach out to you to get more information on your situation.

      Thanks,
      Kevin Graham

  4. We filed chapter 7, 3 years ago reafirmed out home,never missed a payment,never missed payment on car,it will be payed off in 6 months,have 2 small loans never missed payment,my interest rate is 11% on my home,can I get a lower rate?

    1. Hey Roben:

      Depending upon when your bankruptcy was discharged, you may have some options. I’m going to have a Home Loan Expert reach out to you with more information.

      Thanks,
      Kevin Graham

  5. Hi, I filed for Chapter 13 bankruptcy in April 2010. I paid off my debts in September 2014 and Chapter 13 was discharged. I understand that I may be able to get a mortgage in September 2016 (2 years post discharge). My credit score is 705. My house which was included in my bankruptcy, which still hasn’t been foreclosed upon. My question is what is the correct seasoning period to get a mortgage again? 2 years after Chapter 13 discharge or do I have to wait another 3 years after my house is foreclosed upon even though my home debt was included in the bankruptcy? I read that Fannie Mae is honoring the first seasoning period.

    1. Hi Deborah:

      It depends on what type of loan you’re trying to get, but you may have some options. I’m going to have someone reach out to you with more information.

      Thanks,
      Kevin Graham

  6. We had a Chapter 11 four years ago and our case closed over 3 years ago, although we are on a long, long payment plan. We have been rebuilding our credit, and although our credit score is not high, at last check, 640, what are the chances we would be able to refinance our home with the cash out option. We have approximately $85,000 in equity in our home.

    1. Hi Deew:

      Every situation is different. I’m going to have a Home Loan Expert reach out to look into your financial profile and see if we have any options.

      Thanks,
      Kevin Graham

      1. Hi.
        We filed for BK in 2010. We have purchased 2 homes and our credit scores are in the mid 700’s now.
        We would like to remodel the kitchen on our current home. Based on our loan to equity value we can’t take any funds out on a refi.
        Do I understand correctly we do not qualify for a second because of our BK? Do y’all offer a second for folks like us?

        Thank you!

        1. Hi Judy:

          We don’t offer second mortgages to any of our clients. It probably wouldn’t do the trick in your case anyway because those lines of credit still rely on you having a certain amount of home equity. I’m going to pass your comment to a Home Loan Expert to see if we can offer any options or advice.

          Thanks,
          Kevin Graham

  7. Hi,
    We are 2 & 1/2 years out from our chapter 7 discharge. We have begun to rebuild our credit, we have a couple small credit cards and a car loan for a little more than a year. We are tired of renting and really want to buy if at all possible. We are also coming up on 5 years out from a short sale. Will we qualify for a home loan again anytime soon? Thanks you!

    1. Jen:

      Buying a home after bankruptcy can be complex and every situation is different. I’m going to have a Home Loan Expert reach out to you to look into your options and when you might qualify.

      Thanks,
      Kevin Graham

  8. Hello!! Have you ever loaned to anyone in a chapter 13? We are 2 and a half years in. 2 years left. I have a home that is paid for and was wanting to get a loan against it to pay my bankruptcy off.

    1. Sarah-

      We do loan to people that have been through chapter 13 bankruptcy before, but there are some very specific guidelines around timing. I’m going to have a Home Loan Expert reach out to you later this weekend about when you might be able to apply. Happy Thanksgiving!

      Thanks,
      Kevin Graham

  9. Hello
    My BK was discharged in may 2010 and I have good credit now (710)
    My wifes BK discharged in March 2012 she got a loan on the land we plan to build on last year for $38k and we paid it off over 12 months
    we want to build a new home and our income is good and scores are good
    Can we get a contruction loan? for around $450k
    We were told by our local bank that the BK must be discharged for at least 4 years first
    which would be April 2016

    1. Hello, Chad. Unfortunately, Quicken Loans does not currently offer construction loans. Best of luck to you and your wife, though.

  10. Hi, my husband and I are divorced and my name is to be taken off the mortgage. The problem is he filed bankruptcy it will be 2 years in February, does he have to wait until then or can anything be done before that? The best part is he has been living in this home for 7 years now and they still have him in a construction loan at 6.85% please help.

    1. I’m sorry to hear about your situation, Carla. We’re going to need some more details about your situation, so I’m going to have a home loan expert reach out to you with an email. We’ll get to the bottom of this together!

  11. Hi there. We have just passed the 2 year discharge mark on a chapter 7. We reaffirmed with our previous mortgage. We are now looking to sell and build something different. Our debt to credit radio is around 30% which includes current mortgage, 2 cars and a student loan. Our credit scores hover just above 700 and we have excellent payment history on all debts since discharge. We have $0 credit card debt. We are hoping to carry over $8000-10000 for a down payment and also have the property we would like to build on as collateral. Our gross monthly is approx $6000. I’m a stay at home mom, but my husband has been with his current employer for 5 1/2 years. We are looking to finance approx $120,000. What are our chances?? Thanks!

    1. Good morning, Christa. First of all, congratulations on getting out of bankruptcy and rebuilding your credit. It’s encouraging to hear this kind of success story. Unfortunately, Quicken Loans does not currently offer construction loans. We can provide the financing for the home once it’s built, and we can refinance your construction loan into a standard mortgage once your home is completed. Best of luck to you and your husband, and let us know if there’s any way that we can help.

  12. 6 months out of chapter 7. Credit at 603 and on the rise. No real estate in 7. Several credit cards now and all paying on time. Should be in high 600s by end of year. When is the right time to speak with someone to know exactly what I need to strive for and a time frame to expect to try and purchase a home. Never owned before and way too much garbage on the internet to pick thru for valid info on what I need to do. 6 years on current job. Roughly 40k salary. Just need advice and quicken is who I want to deal with when the time is right as I have read nothing but good reviews. Thanks!

    1. Good morning, Kevin! We’d be happy to look into your situation. I’m going to have a home loan expert send you an email to get some more details. They’ll point you in the right direction so you’ll know when it’s the right time to start the home-buying process. Thanks, and have a great week!

  13. Hello, I am completely new to the whole bankruptcy process, so far I have only gotten as far as talking with the attorney that will be assisting me, and writing out my debt. My question is, once I have completed the entire bankruptcy process when is the earliest or how long is the recommended or required waiting period before applying for a home loan…secondly what is the average interest rate on a home loan for someone who has just gone through the bankruptcy process?

    1. Hey, Kirstin. Typically, it takes two years before a person is eligible to get a mortgage. One of the biggest reasons for this is that you need to rebuild your credit over that time. As for an average interest rate, there are many variables that make up the rate. But when you’re ready to proceed, please let us know. We’ll be happy to help you start the journey! Good luck to you, Kirstin!

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