Preferred Realtor Partner Chase
Preferred Realtor PartnerForum Replies Created
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What factors could cause rates to rise instead of fall?
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What are the predictions for mortgage rates in 2025?
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Should I pay off the debt before or after my statement closes?
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This reply was modified 6 months, 3 weeks ago by
Gustan Cho.
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This reply was modified 6 months, 3 weeks ago by
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What specific documents are needed for a VA loan?
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Can you provide a checklist of required documents?
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What happens if I don’t have all these documents initially?
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What’s the average time it takes to see a significant score increase?
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Yes, there is a possibility of being pre-approved for a mortgage with a Chapter 7 discharge in 2 years, but there is a lot to think about:
Waiting Periods
FHA Loans: Generally, 2 years is the wait time for FHA loans after Chapter 7 Discharge with a good credit score to be eligible for pre-approval.
VA Loans: 2 2-year waiting period is required for VA loans due to its resemblance with FHA.
Conventional Loans: Most creditors require a four-year waiting period for conventional loans; however, depending on the client, lenders may be more lenient at other times.
Creditworthiness
Credit Score: Many people have been able to rebuild their credit post-discharge through low utilization and timely payments, which significantly improves their credit score and thus puts them in a better position for a mortgage.
Debt-to-Income Ratio: Mortgage lenders check the ratio between one’s income and combined monthly payment. The lower the DTI ratio, the better, as having less debt is favorable for acquiring a mortgage.
Documentation: Ensure that the documents provided exhibit your stability, such as a budget plan and proof of savings and income.
Letter of Explanation: Certain lenders may want to understand your bankruptcy relief in a letter and how you have been dealing with your finances since the discharge.
Policies of Lenders
A lender’s policies regarding granting pre-approval post-bankruptcy may differ from those of other lenders. It is wise to compare and talk to several lenders to determine their policies.
While it is possible for you to be pre-approved for a mortgage two years post a Chapter 7 discharge, the chances of this being successful will be dependent on how much effort you have put in to repair your credit and the regulations in place for the lender. It is best to consult with a mortgage lender’s expert who can help you based on your particular details.
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Can I get pre-approved for a mortgage after a Chapter 7 discharge within the 2-year timeframe?