Can I Get a Mortgage After Filing for Bankruptcy in South Carolina?
Yes, it is possible to get a mortgage after you file for bankruptcy with help from an experienced Florence, S.C. bankruptcy recovery lawyer at the Reed Law Firm, P.A. Mortgages are secured debts, meaning the bank has the option of foreclosing on the home to recover its investment in the event you cannot make payments. Certain waiting periods may apply depending on the type of bankruptcy you filed for and other factors, such as mortgage type and amount.
Discuss your options for getting a mortgage after bankruptcy with our dedicated South Carolina debt relief attorneys by calling (843) 679-0077 or connecting with our legal team online.
Waiting Period for Mortgage Applications After Bankruptcy
Because lenders require borrowers to undergo thorough credit checks, you cannot generally get a mortgage immediately after discharge. In general, the following waiting periods apply:
Conventional
You must generally wait four years before applying for a conventional mortgage if your debts were discharged under Chapter 7. This may be reduced to two years in extenuating circumstances. If you filed for Chapter 13 repayment, the waiting period is two years from the discharge date or four years from the dismissal date.
Non-Qualified Mortgage (Non-QM)
Although these mortgages often have higher fees and interest rates, non-QM lenders might immediately offer high-risk borrowers a mortgage. They look beyond your credit score and consider your overall financial situation. These lenders might also create customizable loan terms based on your circumstances. Although there is no official waiting period to obtain a non-QM loan after bankruptcy, lenders are taking a risk. This means poorer loan terms.
Federally Backed Program Mortgages
Certain buyers qualify for federally backed mortgages such as FHA, VA, and USDA loans. You must wait two years from the date of a Chapter 7 discharge to obtain an FHA or VA loan and three years to obtain a USDA loan. You only need to wait one year to apply for an FHA, VA, or USDA mortgage after Chapter 13 discharge.
Hard Money Loans
If you have the right collateral, you might immediately qualify for a hard money loan. These loans have higher interest rates and quicker loan terms and will only cover about 75% of the home’s value to limit risks. Purchasing a home with a hard money loan would also require a substantial down payment.
Factors Considered in Post-Bankruptcy Mortgage Applications
In most cases, lenders will review the following even after the post-bankruptcy waiting period:
- Credit score
- Income
- Down payment amount
- Employment history
- Rental and mortgage payment history
- Home value v. loan amount
- Letters of explanation
- Bankruptcy paperwork
An experienced bankruptcy lawyer can help you understand your mortgage options and prepare the right application materials.
Connect with a Dedicated Bankruptcy and Financial Health Law Firm in Florence, S.C.
It is possible to get a mortgage, even a fair mortgage with reasonable interest rates and affordable down payments, in the years following a bankruptcy discharge. Every situation is unique, and our dedicated South Carolina post-bankruptcy recovery lawyers can analyze the best financial option in your case. Call (843) 679-0077 or connect with our Florence legal team online today.
