Photo of attorney Brent Wootton

Take Control
Of Your Future

Get out of debt and plan for what's next.

PLEASE NOTE: To protect your safety in response to the threats of COVID-19, we are offering our bankruptcy clients the ability to meet with us in person, via telephone, or through video conferencing. Please contact our office to discuss your options.

Bankruptcy Help For Everyday People

Can I still get a mortgage after bankruptcy?

On Behalf of | Jul 26, 2020 | Chapter 7 Bankruptcy |

Debtors in North Carolina who file for bankruptcy may be able to reduce or eliminate most debt balances. In many cases, filing for bankruptcy also results in a lower credit score and tarnished credit history. Ultimately, this may jeopardize your plan to get a home loan in the near future.

It can take up to four years to get a mortgage

Generally speaking, you will need to wait four years from the date that you filed Chapter 7 bankruptcy paperwork before you’re eligible for a traditional mortgage. You will need to wait two years before you are eligible for an FHA or VA loan, and it generally takes three years after filing for Chapter 7 bankruptcy to become eligible for a USDA loan. If a bankruptcy was caused by extenuating circumstances, you may be able to get an FHA loan just a year after seeking protection from creditors.

Wait times are shorter if you filed for Chapter 13 protection

In most cases, you can obtain FHA, VA or USDA loans within a year of filing Chapter 13 paperwork. If you are seeking a traditional mortgage, you can typically do so two years after a case is discharged or four years after it is dismissed. The wait time is generally shorter for those who pursue a Chapter 13 proceeding because they have made an effort to repay creditors.

What lenders look at when evaluating a mortgage application

In addition to complying with wait period rules, you will likely need to meet credit score and down payment requirements. To obtain a traditional mortgage, you will typically need a credit score of at least 620 and a down payment of at least 20%. It may be possible to get an FHA loan with a credit score of at least 500 and a down payment of up to 10%.

An attorney may be able to help you learn more about how to file for bankruptcy and the potential consequences of doing so. Legal counsel may also explain how to obtain a mortgage during or after a bankruptcy proceeding.


FindLaw Network