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Can I get a VA loan if My va loan was not included in my chapter 7
Can I get a VA loan if My va loan was not included in my chapter 7?
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1 Reply
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Yes, you can get a new VA loan even if your previous VA loan wasn’t part of your Chapter 7 bankruptcy. However, there are some things to keep in mind:
Key Points:
Bankruptcy Discharge:
Your Chapter 7 bankruptcy must be discharged before you can apply for another VA loan. This usually means waiting two years from discharge to become eligible for a VA loan.
Entitlement Restoration:
It would help if you had enough remaining entitlement to get another VA loan. If your previous VA loan wasn’t included in the bankruptcy and is still open, it could be using up all or part of your VA entitlement. You may need to sell the property, pay off the previous loan to restore full entitlement or use whatever’s left for a new loan.
Creditworthiness:
Lenders will consider your current credit situation despite the bankruptcy since the VA doesn’t set a minimum credit score. Specific requirements vary by lender, but most would like to see at least 620.
Debt-to-Income Ratio (DTI):
Your debt-to-income ratio will also come into play. If your prior VA loan is still open and you are making monthly payments. This can affect your DTI and your ability to qualify for another one.
Residual Income:
According to the VA, specific residual income requirements by region and family size must be met. This helps ensure you have enough monthly money after paying major expenses to financially support yourself or your family.
Documenting The Exclusion:
You might be required to prove why your last VA home alone was not listed under Chapter 7 bankruptcy and provide evidence that it has been maintained well since then.
If you have enough remaining entitlement and meet other eligibility criteria discussed above, contact an approved lender who can evaluate your situation more closely based on these guidelines.