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Mortgage Following Bankruptcy

A Post-Bankruptcy Mortgage is Possible
Buying a home or refinancing a mortgage is a dream for many clients who have filed a Chapter 13 bankruptcy Prestige Residential Loans, LLC acknowledges this challenge and has developed a system dedicated to helping clients get a post-bankruptcy mortgage. We can offer mortgages as soon as one day after bankruptcy plan completion or mortgage loans during your bankruptcy plan. Prestige Residential Loans, LLC provides knowledgeable guidance and expert support through a post-bankruptcy mortgage. With over 30 years of experience, we can find a solution for your desired mortgage.

Process for Post-Bankruptcy Mortgage or Refinancing

At Prestige Residential Loans, LLC, we have developed a system over time to help our clients achieve the best post-bankruptcy mortgage plan for them.

1) Consultation

As a potential client of Prestige Residential Loans, LLC you will have a consultation with a mortgage expert who will work with you to build a foundation and address potential roadblocks to your mortgage application. We will save you time by informing you of the best and most effective mortgage solution.

2) Credit Evaluation

During the credit evaluation stage, we will run your free credit report and review your current credit status. We will consult with you regarding various credit related topics including updating common inaccuracies and verifying accounts. If your credit score needs improvement our team will work with you to improve your score.

3) Application

The application stage will require you to complete our home loan application online or with the help of our team.

4) Loan Submission

Our team will compile necessary documentation and information to complete your application and submit your home loan request to underwriting.

5) Removing Conditions

Following the application stage, our team receives a list of conditions that the underwriter is requesting further explanation for due to potential issues relating to the process of a post-bankruptcy mortgage. Our team’s expertise in resolving these issues is unlike many other lenders who may give up on roadblocks like liens on titles or other complex income problems.

6) Clear to Close

At this stage, our team will collect the final documents to finalize and close your mortgage. An escrow agent or your closing attorney will help arrange the final insurance and escrows.

7) Closing

Congratulations, now we can review, witness, sign, and notarize the documents.

8) Staying in Touch

At Goldwire Mortgage, we like to stay in touch with our clients through a yearly mortgage review and keeping you informed about mortgage trends.

Benefits to getting a Mortgage Post-Bankruptcy:

  • Lower mortgage interest rates
  • Lower payments
  • Potential to skip 1-2 months of payments for refinancing
  • Shorter loan terms
  • Cash-out refinance options

Understanding how Post-Bankruptcy Mortgages Readily Available can be:

Prestige Residential Loans, LLC is unique in that we specialize in post-bankruptcy mortgages and handling more complex refinance cases. Thanks to our years of experience, we can save you time and worry by tailoring our home loan options to support the specific needs of our clients.

Our expertise stems from years of identifying and correcting credit report errors that are common with bankruptcy cases. In terms of refinances, our teams will work with title experts to address any issues with old liens that were not properly delt with after discharge. In contract, most banks will require you to wait up to two years for a Chapter 13 home loan. Many banks will not take the time to help their clients achieve a post-bankruptcy mortgage in a shorter time period. If you work with Goldwire Mortgage, we can offer mortgage solutions during the Chapter 13 bankruptcy plan or as soon as 1 day after bankruptcy discharge.

FAQ About Post-Bankruptcy Mortgage

How long do I have to wait after bankruptcy to buy a home?

With trustee approval, mortgages can be offered 12 months into your bankruptcy plan. Without trustee approval, mortgages can be offered 1 day after bankruptcy discharge.

Can Prestige Residential Loans, LLC still help if I’ve been turned down by other banks or lenders?

Every lender has different requirements for acquiring a home loan. Our team has a specific plan for post-bankruptcy mortgages. With a plan that is customized with loan products to fit your needs, we can help you find a home after bankruptcy.

What type of interest rate can I expect post-bankruptcy?

As a client who is coming out of bankruptcy or has recently completed bankruptcy, you may be accustomed to high rates. Mortgage interest rates are decided by the market and the borrower’s qualifying criteria. At Prestige Residential Loans, LLC we pride ourselves in offering competitive mortgage rates. Our clients are often shocked at the rates they qualify post-bankruptcy.

What happens if I cannot qualify for a post-bankruptcy mortgage?

Sometimes clients have to take a few additional steps to qualify for a post-bankruptcy mortgage. Our team at Prestige Residential Loans, LLC will work with our clients by providing them with the steps and the tools needed to get the home and mortgage of their dreams.

Do Chapter 13 home loans come with additional fees?

All our clients are treated equally and fairly. We know what a huge accomplishment it is to purchase a home. There are no extra fees associated with getting a post-bankruptcy mortgage.

What type of loans are available to post-bankruptcy clients?

There are a variety of home loan types available depending on a client’s specific needs and background. Examples of loan types include USDA loans, conventional mortgages, FHA loans, VA loans, and more. After a consultation with Prestige Residential Loans, LLC we will present the best options for your situation with the best terms and at lowest cost to you.

Issues that can Prevent you from Getting a Post-Bankruptcy Mortgage

As a client is going through the process of bankruptcy and seeking a mortgage, there some factors that they should be aware of. These factors could negatively impact their home loan application. By keeping an eye on the following factors, you can be in a better position to apply for a post-bankruptcy mortgage.

1) Credit Score (21%)

Credit score is one of the largest factors impacting your home loan application. There are many factors that could negatively impact your credit score including errors from bankruptcy or a lack of recent credit history. By raising your score, you can have a better chance at buying a home post-bankruptcy.

2) Foreclosure (18%)

If you have recently left your property this can negatively impact your ability to get a home loan.

3) Late Payments (15%)

Any history of past due payments on your history can negatively impact your chance of getting a home loan. Make sure you are making payments on time.

4) Current Home Condition (13%)

It is important that your current home is kept in good condition for an appraiser’s evaluation. By doing so, you can help ensure your home gets appraised for the preferred amount.

5) Low Savings (12%)

The amount of money kept in your savings account can impact your post-bankruptcy home loan application. It is important that you have enough money in savings for a down payment and reserve money as well.

6) Employment History (9%)

In order to get approved for a post-bankruptcy home loan you must have a stable work history and sufficient income.

7) Liens on Title (9%)

Having liens can negatively impact your ability to get a post-bankruptcy home loan and the type of rate you get. Liens can include errors that have not been resolved from your bankruptcy history. All liens need to be removed from your history before buying a home.

8) Other (3%)

Various smaller issues can arise during the process that require consultation and support from an experienced bankruptcy attorney.

Explore the Types of Home Loans Available Post-Bankruptcy

USDA Home Loans

There are various post-bankruptcy loan types backed by the USDA. This program is for financing qualifying properties in rural areas. This loan types typically have low interest rates and often provide 100% financing.

VA Home Loans

This loan type is for veterans and their families; they are guaranteed by the U.S. Department of Veterans Affairs.

Government Streamline

There a several government programs for homeowners with current government-backed mortgages to streamline refinancing. Homeowners can then lower their payments and interest rates following a bankruptcy leading to a shorter loan length.

FHA Home Loans

This loan type is from the Federal Housing Authority (FHA). It helps post-bankruptcy clients with lower income and credit scores to buy a home with less money down. This loan type has easier qualifying criteria compared to other home loans.

Portfolio Loan

This type of loan allows clients to get a home loan following bankruptcy when they were previously struggling to get a loan through other programs. This issue is usually due to a negative credit event. This loan type is not sold to agencies like VA, FHA, or USDA, nor Fannie Mae or Freddie Mac.

Jumbo Loan

We offer a variety of jumbo mortgages designed for post-bankruptcy clients so you will not have to limit your search while in the process of buying a home.

Post-Bankruptcy Mortgage Interest Rates

Many clients fear high interest rates when seeking a post-bankruptcy mortgage. The good news is there are many factors that influence the mortgage interest rate you get and there are things you can do to lower the interest rate. Below are some tips that can help you get a lower mortgage interest rate.

Potential Factors that Could Impact Interest Rates Post-Bankruptcy

Filing bankruptcy often negatively impacts your credit score but it is possible to improve your creditworthiness and achieve competitive home loan interest rates. The most common types of bankruptcy of our clients are Chapter 7 and Chapter 13. Chapter 7 results in the cancellation of previous debts by liquidating your personal assets. Chapter 13 bankruptcy focuses on reorganizing your personal debts into a manageable repayment plan over the course of three to five years.

Credit score is one of the most critical factors impacting your mortgage interest rates post-bankruptcy. Many clients fear how bankruptcy could impact their credit score and often believe that home ownership is not a possibility. In reality, it is not uncommon to see a decrease of 50-150 points following bankruptcy. Even so, this should not deter you from achieving your goal of homeownership. Our team can help you rebuild your credit post-bankruptcy to ensure you can buy a home with a competitive interest rate.

Levels of Credit Score that Could Impact Your Interest Rate

Below 620 – Increased interest rates due to the risk of loan default. Credit repair is a good option if your credit score is at this level.

620-640 – While this is a small range of credit scores it can vary the rate by up to 0.25%.

640-680 – Within this score range there should not be an impact on the interest rate; this is quite common for borrowers.

Above 680 – If your credit score is above this, it can improve your interest rate by approximately 0.25%.

Understanding how Debt levels Affect Your Mortgage Interest Rate Post-Bankruptcy

The level of debt you have greatly impacts your mortgage interest rate. More specifically, your debt-to-income ratio is a major factor when determining your interest rate and mortgage. If your debt-to-income ratio is too high then this could negatively impact your plan to buy a home. We suggest making regular monthly payments during your bankruptcy plan and to keep your debt levels low.

Mortgage Interest Rates and Home Loan Programs Post Bankruptcy

The mortgage interest rate you get post-bankruptcy is also largely impacted by the home loan program you use. The best options include government backed options like VA, FHA, and USDA home loan programs. Another option can be portfolio loans, but they often have higher rates, but work for clients that aren’t able to qualify for the previous programs. Portfolio programs rates can be between 0.5%-3%.

How to get a Better Interest Rate Post-Bankruptcy

As a client who’s gone through bankruptcy you must know that this is not the end of your financial well-being. By filing bankruptcy, you have an opportunity to start fresh and have new financial goals. Prestige Residential Loans, LLC can help you achieve your home ownership after bankruptcy.

Ensure Monthly Payments are Made on Time

By showing that you are a good borrower and making monthly payments on time you can lower your mortgage interest rate. When applying for a mortgage they often ask for proof that you have begun to reestablish your financial status. This can also show the lender that you are ready to be a homeowner. Overall, this will help show your creditworthiness.

Rebuild you Credit Score with a Secured Credit Card

When you choose to use a secure credit card, you can work to achieve a better credit score. This type of credit card requires you to put down a deposit to use for your everyday purchases. Over time you can get a larger limit and at the same time rebuild your credit score. With a higher credit score you can get lower mortgage interest rates.

When using a secure credit card, it is best to make smaller purchases on the card to ensure you can pay the amount back. It is also good to leave a small balance on the card at the end of each month. This strategy helps build your credit.

Check your Credit for Errors After Bankruptcy

It is important to monitor your credit following bankruptcy. There should be nothing left on your credit file that could negatively impact your credit score. It can help to sign up for a credit monitoring service and be aware of any changes, so you know when you are ready to buy a home.

Connect with a Mortgage Professional for Consultation

When you meet with our team at Prestige Residential Loans, LLC we can help address any potential issues when it comes to you purchasing a home post-bankruptcy. Certain factors such as your credit score, loan size, debt-to-income ratio, location of the property, and personal income can prevent you from qualifying for a government-backed home loan. By speaking with an experienced mortgage professional, you can save yourself time and energy on your journey to finding a home post-bankruptcy.

  1. Prestige Residential Loans, LLC can analyze your credit file and even help you get started with credit repair if needed. We can also help with any errors on your credit report.
  2. Our team can review your home ownership goals and find the best home loan program for your situation.
  3. At Prestige Residential Loans, LLC we have years of experience specifically dealing with post-bankruptcy mortgages. We always stay up to date with the latest information to ensure we find the best home loan program for you.

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