Getting a Mortgage After Bankruptcy in Fort Lauderdale

While filing for bankruptcy can be an effective means of managing debt that’s become unbearable, it’s inescapable that it will leave a mark on your credit rating. It will be a challenge to obtain a home mortgage after bankruptcy, for example, but bankruptcy does not necessarily mean homeownership is permanently out of your reach.

Buying a home after declaring bankruptcy is possible with time and the proper steps to restore your financial standing. The length of time you must wait and the specific steps you’ll need to take will depend on the type of bankruptcy you’ve filed, the type of loan you’re seeking, and the unique specifics of your situation.

In Florida, the Loan Lawyers of Fort Lauderdale is an experienced total debt solution law firm with a proven track record of success that can help you plan for a future of financial stability and homeownership. With our unique and multifaceted approach, we can help guide you through the process and ramifications of bankruptcy or other debt relief solutions that are right for you.

Contact us today for a free legal consultation about bankruptcy, home mortgages, and how we can help you regain financial stability and restore peace of mind.

Can You Buy a House After Bankruptcy in Fort Lauderdale Florida?

Yes, you can obtain a mortgage and buy a house after entering bankruptcy in Florida. Our bankruptcy attorneys can guide you and work with you as you go through a process that requires:

• Time to complete and recover from bankruptcy,
• Determining and qualifying for the right type of loan, which may be affected by your bankruptcy filing, and
• Additional requirements that may apply to you due to extenuating circumstances.

How Long After Bankruptcy Can I Get a Mortgage in Florida?

First, before you can consider obtaining a mortgage after bankruptcy,  you must complete the bankruptcy process. This means the U.S. Bankruptcy Court judge presiding over your filing has discharged your bankruptcy, or has dismissed it because your case doesn’t meet the legal requirements of bankruptcy.

Among the two types of bankruptcies typically pursued by individuals or couples, a Chapter 7 “liquidation” bankruptcy typically takes four to six months from filing to discharge, while a Chapter 13 “reorganization” bankruptcy lasts three to five years.

Next, you’ll need to endure a waiting period before lenders will take a chance on providing you with a home loan. Bankruptcy, which stays on your credit report for 7 to 10 years, makes you a higher-risk borrower in the eyes of lenders. You’ll need time between concluding your bankruptcy and applying for a mortgage to establish a record of responsible credit management.

How long after bankruptcy you’ll need to wait to get a mortgage will depend on your bankruptcy filing and the type of loan you pursue, i.e., conventional mortgage (from a bank, credit union, etc.), Federal Housing Authority (FHA) loan, Veterans Affairs (VA) loan or U.S. Department of Agriculture (USDA) loan.

Bankruptcy Filing	Conventional Loans	FHA or VA Loans	USDA Loans
Chapter 7	4 years after discharge	2 years after discharge	3 years after discharge
Chapter 13	2 years after discharge	1 year after discharge	1 year after discharge

 

Loan Options for Buying a House After Bankruptcy

As you consider taking out a mortgage after bankruptcy, you must also determine what type of mortgage fits your needs.

USDA loans are designed to help homebuyers who have less-than-perfect credit and lower-than-average incomes. They may not require a down payment, and carry low interest rates (or possibly subsidized payments). However, USDA loans are only available for homes in rural or suburban areas that fit USDA guidelines.

FHA loans are available to borrowers with low credit scores and require lower down payments than conventional private loans. A down payment as low as 10 percent of the purchase price may be available to borrowers with a credit score as low as 500. A downpayment of as little as 3.5 percent may be available with a credit score of 580 or higher. FHA loans also require private mortgage insurance.

Most homeowners get conventional, private home loans from banks, credit unions, or other financial institutions. Requirements can vary considerably among various home loans, but credit score requirements are generally stricter for conventional mortgages than for government-backed loans.

If you or a family member is an active service member or a veteran, you may be eligible for a VA loan. Loans made through the U.S. Department of Veterans Affairs don’t require a down payment or mortgage insurance, and interest rates are typically lower than what conventional loans require. However, the VA does charge a funding fee of up to 3.3 percent of the home’s price.

Finally, as the federal government continues to change, keep in mind that availability, eligibility requirements, and policies of government-backed home loans are also subject to change.

Tips for Boosting Your Mortgage Approval Odds After Bankruptcy

To secure a home loan after a bankruptcy, you’ll need to rebuild your credit score and demonstrate that you understand your financial situation and will meet your responsibilities. To do this, you’ll need to:

• Establish a stable income. This means regular receipt of wages and/or benefits (e.g., Social Security retirement or disability payments, VA benefits, pensions, etc.) that allow you to meet your recurring financial responsibilities.
• Demonstrate responsible debt management, which means making consistent on-time payments for rent, utilities, credit card bills, loans, etc.
• Rebuild credit wisely. You’ll be able to get a secured credit card after a bankruptcy to help you establish a new credit record. Secured credit cards require a small deposit, which serves as collateral for your credit limit. It is best to put no more than 10 percent of your take-home pay on a credit card and to stay current on your monthly payments. If you carry a balance, keep it at less than 30 percent of your credit limit.
• Avoid New Debt. Live within your means and avoid going into debt, except for making specific use of tools like secured credit cards or installment loans to re-establish your credit.

Why Work with a Florida Bankruptcy Attorney?

Bankruptcy is a legal process that provides financial relief to individuals and businesses by eliminating certain debt obligations and enabling them to repay other debt through a court-approved plan. Those who qualify for bankruptcy have a right to seek its protections and be freed from struggling with overwhelming debt.

Working with an experienced bankruptcy attorney makes going through the legal process of bankruptcy and its aftermath considerably more straightforward. At Loan Lawyers, we know that you want to be at peace, feel good about yourself, and have a financially secure future for yourself and your family. We understand what you’re going through and want to help you get out of debt and achieve financial stability. This is why we provide sensible, affordable, and proven debt mitigation, bankruptcy, and foreclosure defense solutions for our clients.

We will listen to you, explain the options realistically available to you, and help you choose the best solution for you and your family based on your individual situation and needs. Because we are able to apply multiple debt and foreclosure-avoidance solutions, your Loan Lawyers attorney is in a unique position to maximize leverage for you and help you determine the best possible outcome for your situation.

Talk to a Florida Bankruptcy Attorney Today

If you’re struggling with debt, you need the counsel of experienced Fort Lauderdale bankruptcy attorneys who have your best interests at heart. At Loan Lawyers, we believe in providing our clients with exceptional legal representation at an affordable price when they face insurmountable debt, potential home foreclosure, and/or the need for bankruptcy protection.

Call Loan Lawyers today at (954) 523-HELP (4357) in Fort Lauderdale, Florida, or reach out online for your free consultation to learn about how we can help you.