I received a lot of VA loan questions in regards to bankruptcies (BK) and foreclosures. Most often the questions are to determine the time a borrower has to wait after their bankruptcy before they are eligible for a VA loan? Or There is something they can do while they wait to help their chances of obtaining approval for a VA loan once the waiting period has ended. So let digging because from now underwriting guidelines Inc. are much more flexible than conventional or FHA loan guidelines.
Chapter 7 bankruptcy
First, a Chapter 7 bankruptcy includes a complete discharge of the debtors. Once the request is file and accepted by the court and the BK is finalized debtor is freed from the responsibility of creditors. Typically, a Chapter 7 bankruptcy subscription Inc. Guidelines require a waiting period of 2 years from the date of discharge from bankruptcy before the funding available. There are, however, certain uncontrollable circumstances such as medical conditions or the loss of jobs that allow financing 1 year after the date of discharge, but these are very rare. contrast this with conventional patterns at the time of the article by Fannie Mae is now requiring a period of 4 years of waiting after a chapter 7 BK.
Chapter 13 Bankruptcy
A chapter 13 on the other hand is called a plan of their employees. A trustee appointed by the court and a payment plan negotiated. A veteran of fact may be eligible for a VA mortgage while in Chapter 13 bankruptcy, but must have at least made 12 payments on time and have the loan approval by the receiver. Also, after chapter 13 ends the borrower is eligible vet immediately. Fannie Mae requires a waiting period of 2 years after discharge.
The guidelines of the VA the period of foreclosure follow the same rules as the Chapter 7 bankruptcy. Basically, the veteran borrower must wait 2 years. Fannie Mae requires a waiting period of 5 years now, after the completion of the foreclosure, ouch.
Tips for later of bankruptcy
As VA top lender who has dealt with its fair share of failures we've put together some tips that the borrower can put to go use.
- I recommend after the bankruptcy has been discharged you send a complete copy of their discharge papers with all convenient times of the three credit bureaus Equifax, Experian and TransUnion. Often times some of the Accounts included in bankruptcy do not accurately reflect.
- I also suggest you start pulling your credit at least once a year from each consumer credit reporting companies. Keep a record of what happened and make sure no errors by the time you are ready to apply for a VA loan.
- Also, if you have no other creditors approving borrowers after bankruptcy it is strongly recommended restoring your credit if you have not already done so. Sometimes a borrower with a lack of credit is so difficult with bad credit. And, of course, always, always make your payments on time!
Of course, the VA Guidelines bankruptcy loan could change or modify in the future, but so far most of the guidelines Inc. has stayed the same.
About the Author:
Josh is one of the top VA loan officer’s in the nation. He has close in excess of $50,000,000 (328 units) in the past 6 years. He currently works for BMS, a subsidiary of 1st National Bank with the ability to lend nationwide.
Article Source: ArticlesBase.com – Va Home Loans and Guidelines for Bankruptcy and Foreclosures