AEM Mortgage Minute with Deanna Daughhetee

Declared bankruptcy? You may be able to get a mortgage approval sooner than you think.

Wednesday, August 8, 2007

It’s one of the major concerns for someone declaring bankruptcy: How long must you wait before you can once again be approved for a mortgage? Different lenders have different criteria, so there is no firm answer to this question. Generally speaking, however, your wait may not be as long as you think.

To be eligible for mortgage approval after bankruptcy, two things will need to occur: You must re-establish good credit; and your bankruptcy must be fully discharged. For a Chapter 7 bankruptcy, where debts are simply forgiven, most lenders require a four-year period between the discharge of the bankruptcy and the application for a mortgage. For a Chapter 13 bankruptcy, sometimes referred to as a “wage earner plan,” the wait is usually two years.

There are extenuating circumstances that can, in some cases, allow for mortgage approval to occur sooner. To find out if you are eligible for mortgage approval, or to learn more about mortgage approvals after bankruptcy, call an AEM representative today.