Getting A Mortgage in Denver With A Chapter 7 Bankruptcy

Getting A Mortgage in Colorado With A Chapter 7 Bankruptcy

“Pointers” and “Things” You Need to Know

If you have had a Chapter 7 Bankruptcy and have been thinking about refinancing a current mortgage or purchasing a new home, here are a few pointers and things you need to know.

First off, it’s very important to know the wait period from the discharge date. 

If you are thinking of conventional lending, the waiting period for getting a mortgage loan after the discharge date of the Chapter 7 Bankruptcy is 4 years.  However, if the bankruptcy was due to extenuating circumstances beyond your control the waiting period can be as little as 2 years.  Two examples of extenuating circumstance might be death of a spouse or a serious accident with large medical bills and a long recovery period. 

On the other hand, if you are thinking of obtaining FHA or VA financing in Denver the waiting period is just 2 years from the discharge date.  If it was due to extenuating circumstances it can just 1 year. 

Few Things You Need To know:

·         You will need to reestablish your credit after the bankruptcy.  When applying for a mortgage loan, the last 12 months on your credit report will be scrutinized for any delinquency, collections or judgments.  Anything derogatory and your loan could be in jeopardy.  Again, your credit report will have to show you have been using credit and have paid it on time.  

·         Keep your bankruptcy paperwork in order, should be placed in a safe and easy to find place.  Once the process begins more than likely your bankruptcy paperwork will need to be reviewed. 

·         Often times, you are asked to provide a letter of explanation for the reason of the bankruptcy and what you have done to correct the issue to keep it from happening again.

·         If your bankruptcy was due to extenuating circumstances beyond your control, you will need to provide proof of that.  For example, if your ex-spouse was a drug addicted heroin addict who went missing for 30 days, zeroed out your bank account and jacked up your credit cards, you will need police reports, lawyer letters, bank and credit card statements.

For a FREE no obligation rate quote to see if you qualify for a mortgage loan even if you’ve had a bankruptcy, give me a call at 720.279.6351. It will take just 5 minutes of your time to gather the information and you will get a quote back within an hour.
Article by Shawn Janusheske
Shawn is a Senior Loan Officer with Catalyst Lending. For questions or for a quote contact Shawn: 720.279.6351 Office, 720.988.5404 Mobile, Address: 400 Inverness Pkwy, Suite 200, Englewood, CO 80112

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