BANKRUPTCY
Bankruptcy! There
are two main types. Chapter 7, where
all debt is extinguished and Chapter 13, which is based on a repayment plan for
up to 5 years. Most people choose
the Chapter 7 plan, but the Chapter 13 is often used when there is a home
involved.
OK,
you’ve had a bankruptcy. So what!
There are millions of people who have had a bankruptcy.
Most people think that a bankruptcy is the end of their credit life.
This is NOT true! Granted,
you might not be able to get a credit card or personal loan for a while and if
you did, you would pay a high rate of interest, but time heals all credit
wounds.
Believe it or not, you can be approved for a
mortgage ONE day out of
Bankruptcy and at MARKET RATES after
just TWO years of the Chapter 7 bankruptcy discharge date.
If you had a Chapter 13 (or are still in a chapter 13), you might be able
to be immediately approved if your Chapter 13 is at least one year old and your
payments have been made on time, call for details if you have a Chapter 13.
Once you file for Bankruptcy and that bankruptcy
has been discharged, you must re-establish credit and all payments must be made
on time without any discrepancies.
HOW
DO YOU OBTAIN A MORTGAGE AFTER A Chapter 7 BANKRUPTCY?
If you have a Chapter 7 Bankruptcy, you must wait
TWO years. Within this period you
should do several things, starting with re-establishing your credit.
#1 Get
a checking account and manage your money properly.
#2 Find
a place to rent and PAY BY CHECK Twelve
canceled checks showing that you have been
#3 Place
utilities (Gas, Water, Electric, Cable) in YOUR name and be sure to pay those
utilities with a CHECK and on time.
You will be asked to provide a letter from each utility stating that your
payments have been on-time.
#4 You
should also reestablish credit with a couple “small” credit cards.
#5 Lastly,
stay in contact with you me. Call at
least every two months.
HOW
DO YOU OBTAIN A MORTGAGE when you are CURRENTLY in a
Chapter 13 BANKRUPTCY?
Here
are the basic FHA guidelines for approving a loan while still in a Chapter
13/CCC Plan:
(1)
The plan must be in effect for at least 12 months;
(2)
No late payments on the plan;
(3)
No mortgage lates since the inception of the plan;
(4)
No lates on any other account since the inception of the plan;
(5)
Permission and a Certified Payoff
from the Plan Trustee;
(6)
Your new mortgage payment can not exceed 31% of your Gross Monthly income and
your mortgage plus debts can’t exceed 43% of your gross monthly income.
If you are recovering from a Chapter 7 BK, just
before that 2-year discharge date, call me at 1-800-817-8743.
We will schedule a loan interview for you.
Please provide the following at that appointment.
1.
2
most current years W-2’s (for each borrower)
2.
4
most current PAYSTUBS (for each borrower)
3.
Last
3 Months BANK STATEMENTS
4.
Last
12 Months canceled RENT checks
5.
Letter
from Utilities
6.
Bankruptcy
Petition and Discharge
Licensed Mortgage Banker - New Jersey Department of Banking and Insurance; Licensed by the Pennsylvania Department of Banking; Virginia Licensed Mortgage Lender