VA Home Loans Two Years After a Chapter 7 Bankruptcy

A bankruptcy is considered a serious blemish on your credit report by mortgage lenders. Most types of home mortgage loans require anywhere from a 3-7 year waiting period following the discharge date for you to be considered for financing. Even after that waiting time, there is no guaranty you will be approved. The guideline for a VA loan is that after 2 years, the bankruptcy may be disregarded.

This means that a VA lender does not automatically disqualify a veteran for a home loan because of the prior bankruptcy. The lender must evaluate the veteran’s current circumstances to determine if he or she is eligible for a VA home loan. The requirements are naturally somewhat stricter, as it is the lenders responsibility to make sure the veteran is not put into a financially difficult situation again. There is hope, the loan specialists have helped many veterans purchase or refinance a home following a Chapter 7 bankruptcy.

A few of the major factors we will take into consideration when reviewing your application include:

  • The circumstances that caused the bankruptcy, and what has changed.
  • The veteran’s current income, and is the income considered stable?
  • The veteran’s current monthly obligations as a percentage of their total income.
  • The credit history of the veteran since the bankruptcy, and is there any re-established credit, or new derogatory credit.
  • Is there verifiable rental history available where the veteran currently resides?

These are just a few examples of what an underwriter will look for when reviewing your eligibility. You should have your situation evaluated by a VA Home Loan specialist to determine if you are qualified to obtain a loan. No matter what caused your bankruptcy, (divorce, health problems, loss of income, etc.), purchasing a home or refinancing your present home loan that has unfavorable terms is a very important step to your financial recovery.

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Call and speak to one of our VA loan specialists today. The toll-free number is (866) 704-2826. You can also complete our safe, secure online request form. There is no obligation to you, and no cost to Get Pre-Qualified. You will be contacted by VA loan specialist who will assist you with each step from start to finish.

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