With the collapse of the housing bubble over the past several years and the growing awareness of the dangers of such variable interest loans, prospective purchasers are reevaluating FHA loans in greater numbers than ever before. After filing for bankruptcy, many consumers wonder if they can even qualify for FHA loans. The response might startle you.
Understanding the essence of the FHA loan program is the first step in determining whether you are eligible for FHA loans after bankruptcy. They presently insure approximately one-third of all mortgages in the United States. The actual procedure does not involve the government lending you mortgage funds. Instead, you obtain your mortgage from federally-approved lenders, and the FHA insures the loan.
Since its inception during the Great Depression, the FHA's role in homeownership has grown, but its primary objective of enabling low- and middle-income families to purchase properties without a large down payment has not changed. Obviously, families that have recently experienced bankruptcy have a reduced standard of living, which makes the prospect of an FHA loan all the more appealing. The positive news is that bankruptcy approval is possible!
However, the requirements differ depending on the type of bankruptcy filed. Chapter 7 and Chapter 13 bankruptcies are very distinct forms of liquidation, and each affects your eligibility for FHA loans after bankruptcy differently. It is crucial to comprehend how each form of proceeding affects your ability to interact with the FHA.
In order to file for Chapter 7 bankruptcy, you must have been discharged from the proceeding for at least 24 months and have maintained an impeccable payment record since then. When it comes to your eligibility for FHA loans after Chapter 13 bankruptcy, the situation is even more favorable. If you continue to make payments on time after a year, you may be eligible for approval.
Lenders prefer that you initiate the process of re-establishing your credit, though this is not always necessary. Many individuals would rather not incur new obligations so soon after emerging from bankruptcy.
To qualify for FHA loans after a bankruptcy, you must be able to provide documentation of your payment history and compliance, so plan accordingly. Even though the process can be more time-consuming than traditional market-based home loans, it is reassuring to know that borrowers who have recently endured the worst effects of a deteriorating economy can still gain access to this essential component of the American ideal.""
" - https://www.affordablecebu.com/
