How to Get a VA Home Loan After Bankruptcy
If you have filed for bankruptcy in the past and would like to buy a home or refinance your existing home with a VA loan, knowing what actions to take will help you get a VA home loan after bankruptcy. The process is not difficult, but having the right information can help guide you on your path to obtaining a VA home loan.
VA Loan Bankruptcy Seasoning Requirements
If you filed for a Chapter 7 bankruptcy, the Veterans Administration requires that you wait two years from the date your bankruptcy was discharged; not the filing date. If you plan to refinance any existing home loan that was not included in your bankruptcy, you must have reaffirmed the mortgage debt or you are not eligible for a VA home loan.
For borrowers who are currently making payments on a Chapter 13 bankruptcy, you can get a VA home loan after bankruptcy once you have made satisfactory payments for at least twelve consecutive months. You must also have written permission from your bankruptcy trustee to apply for a VA home loan. If you have paid your Chapter 13 bankruptcy in full, you can apply for a VA home loan immediately.
If you filed for bankruptcy, but the filing was dismissed, you must wait two years from the dismissal date of your bankruptcy filing.
Be sure to keep copies of all your bankruptcy paperwork readily available because in many cases your credit report may not reflect the discharge or current status of your bankruptcy. If you have additional questions, please visit our VA Loan FAQ Bankruptcy page for more details.
Reestablish Your Credit History
To get a VA home loan after bankruptcy, you must have reestablished your credit history to qualify for a VA loan. You must meet both the Veterans Administration’s credit guidelines and the lender’s guidelines. To meet the VA’s guidelines, you must have twelve consecutive months of credit reporting with no negative reporting. It is best to have at least three credit accounts that have been reviewed and reported to the credit bureaus by the creditor. Lender guidelines vary widely, but generally a lender will require at least a 620 FICO credit score from two credit bureaus in order to get a VA home loan after bankruptcy.
While revolving credit accounts (credit cards) are typically the easiest accounts to get once your bankruptcy is discharged, it is best to have a mix of revolving and installment accounts. Installment accounts are loans for automobiles, education, etc., where the amount you borrow is fixed and your monthly payment is also fixed throughout the life of the loan.
Speak With a Loan Officer
In our experience, it is best to speak with a loan officer about a VA home loan several months before you begin looking for a new home or plan to use your VA loan eligibility to refinance your existing home. This allows your loan officer to verify your VA loan eligibility, review your income for loan qualification and make sure that you have met the necessary credit guidelines to get a VA home loan after bankruptcy. Working with an experienced VA loan officer can help ensure that you are able to get a VA home loan after bankruptcy and answer any questions you might have.
Apply to Get a VA Home Loan After Bankruptcy
While it does take some time to complete these requirements, you can apply to get a VA home loan after bankruptcy once you have met all of the VA’s bankruptcy seasoning requirements and reestablished your credit history. Following these step will help set you on the right path to get a VA home loan.
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