October 9th, 2014 2:12 PM by Richard T. Cirelli
When Can You Finance Again after a Short Sale, Bankruptcy or Foreclosure?
It’s been a few years since the recession that began in 2008, forcing many homeowners into Bankruptcy, Short Sales and Foreclosure.
The chart below provides a general overview of the financing options after a borrower has incurred a major derogatory credit event. The waiting periods vary among the different Government Agencies. The policy among Jumbo lenders vary greatly too.
4 to 7 Years
BK – Ch 7
BK – Ch 13
4 to 7 years
· In some cases, the waiting period can be shortened by up to 2 years for “Extenuating Circumstances”. These are defined as non-recurring events that are beyond the borrowers control that result in a sudden and prolonged reduction in income or a catastrophic increase in financial obligations. Events must fully documented.
· Waiting periods for Jumbo lenders vary greatly among lenders.
Considering the variation among the Government agencies, lenders and jumbo lenders, it’s always best to consult with a mortgage company that has access to multiple lenders to assure that the borrower meets the guidelines and the file is documented properly.