If you're a homeowner who's trying to decide whether to go through bankruptcy, foreclosure, or short sale, here are some food for thought:
How long must you wait before obtaining mortgage financing after a bankruptcy, foreclosure, or short sale?
Conventional Loan:
Chapter 7 Bankruptcy 4 years from discharge.
Chapter 13 Bankruptcy 2 years from discharge date or 4 years from dismissal date.
Foreclosure 5 years from completion date.
Deed-in-lieu of foreclosure 5 years from completion date.
Short Sale 2 years from completion
Fannie Mae
Bankruptcy (chapter 7 or 11) 4 years.
Bankruptcy chapter 13 2 years from discharge date or 4 years from dismissal date.
Multiple Bankruptcy Filings 5 years if more than one filing within the past 7 years.
Foreclosure 7 years-after a prior foreclosure to be eligible for a new mortgage loan eliigible for sale to Fannie Mae, unless the foreclosure was the result of documented extenuating circumstances, which only requires a 3-year waiting period (with additional requirements).
Deed-in-Lieu of Foreclosure 2 years-80% max loan-to-value ratios
Pre-foreclosure Sale 4 years-90% max loan-to-value ratios
Short Sale 7 years-Loan-to-value ratios varies.
FHA (Federal Housing Administration-government backed/insured loans)
Chapter 7 Bankruptcy 2 years from discharge date.
Chapter 13 Bankruptcy 1 year from the payout must elapse and payment performance must be satisfactory-buyer must receive permission from the court to enter into a mortgage.
Foreclosure 3 years from completion date.
Short Sale -No time restriction if the borrower was current at the time of the short and all mortgage and installment payments were made within month due for the previous 12 month period prior to the short sale application date, and the proceeds from the short sale serve as payment in full.
-3 years from completion date if default at time of short sale.
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