Tag Archives: Loan Application

How long do I have to wait after a foreclsoure or bankruptcy to get another loan?

Bankruptcy:

  • Chapter 7 or Chapter 11: A four-year waiting period is required, measured from the discharge or dismissal date of the bankruptcy action.
  • Chapter 13: Requires two years seasoning from the discharge date to loan application date or four years from the dismissal date to the loan application date.
  • Multiple Filings: For a borrower with more than one bankruptcy filing within the past seven years, a five-year waiting period is required, measured from the most recent dismissal or discharge date.

Foreclosure: Loans require 84 months seasoning from foreclosure completion to loan application date regardless of reason

 

Now for Short Sales and Pre-Foreclosures, the rules are a little different:

 

2 years – 80% maximum LTV
  • 4 years – 90% maximum LTV
  • 7 years – standard LTV

Now for FHA loans, the waiting period is less:

Bankruptcy: 2 years must have elapsed since discharge or dismissal of Ch 7 or Ch 13.

 

Bankruptcy High Balance Cash-Out Refinance: Not allowed in past 7 years.

 

Foreclosure, Deed in Lieu or Short Sale: 3 years must have elapsed since completion. The wait period for short sales can be waived if all of the following conditions are met:

·        The loan was current at the time of the short sale

·        The loan was paid on time in the 12 months preceding the short sale

·        All other installment debts were paid on time in the preceding 12 months.

 

Don’t make your loan tougher than it needs to be

I just closed an Idaho Mortgage loan in about 30 days that I could have had finished a week earlier.  Why did it take a week longer?  Easy, the borrower didn’t supply me with a document I had asked for multiple times.  I had to go find it from a third party and it didn’t get to me very fast.

When I start working on your loan, I will tell you what we will need to proceed and even give you a written list. 

I had asked for this document for at least 4 times while the borrower was looking at homes.  I even nudged the realtor to help me get this.  Even when the borrower got their offer accepted with a short contract closing date, they still had not gotten me that document.

When you’re getting ready to move, and have started packing up, that is not the time to start  looking.  I had to have a third party try to locate the missing document.  It was uncertain if I could even obtain that document or how long it would take.  It had the potential of killing the deal at the last moment.

In this case, the Title and Escrow company was able to get me that document in about 10 days.  It still took a lot of effort to get final underwriting approval and get the loan documents to closing before the expiration date.  This was an stressful situation that didn’t need to happen.

The bottom line is that borrowers need to get everything in to their loan officers asap.  I can work miracles, but don’t walk on water nor do I have a “magic loan wand” that can make underwriters waive loan requirements. 

As I said earlier, one of my goals as your Idaho Mortgage Guy, is to reduce the stress involved to a minimum.  Buying a home and moving is stressful enough.  Don’t bring extra stress upon yourself.

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