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Mortgage After Bankruptcy
Hello,
I am seeking a refinance for my owner-occupied primary residence in Chicago. I recently received a Chapter 7 discharge in May 2026 and am looking to refinance out of a hard money loan.
My approximate loan amount needed is $260,000-$265,000. My mortgage score is approximately 643, and I have stable W-2 employment with the City of Chicago.
Can you please let me know:
1. Do you have any Non-QM refinance programs available for a recent Chapter 7 discharge?
2. What is the minimum waiting period after discharge?
3. What is the maximum LTV available for an owner-occupied refinance?
4. What minimum credit score is required?
5. Would a co-borrower with stronger credit improve eligibility or LTV?
6. Can closing costs be financed into the loan?
Thank you for your time. I look forward to hearing from you.
Was referred to you.
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3 Replies
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Thank you for reaching out with your question. You came to the right place. We are not just members of an online community; we are NMLS-licensed mortgage loan originators who are actively originating, processing,, and closing mortgage loans. We are licensed in multiple states, and our views can provide professional lending or mortgage advice. We will do our best to help you feel more confident and prepared when speaking with Non-QM lenders.
- Non-QM Programs After Chapter 7 Discharge
Non-QM lenders know that life can be unpredictable, so they have special programs for people who have gone through bankruptcy, often called “bankruptcy seasoning” or “credit event” programs. Lenders like Angel Oak, Acra Lending, Newrez, and A&D Mortgage are worth checking out.
- Minimum Waiting Period After Discharge
For Non-QM loans, the waiting period after a Chapter 7 bankruptcy is usually:
- Some Non-QM lenders will work with you right after your bankruptcy ends, but you might see lower loan amounts compared to your property value and higher interest rates at this time.
- In most cases, you’ll need to wait at least 12 months before qualifying for these programs.
- After 24 months, most programs accept applications and offer more competitive rates.
- I have helped many folks with a bankruptcy discharge with no waiting period.
- Carrington Mortgage Services is one of our preferred wholesale mortgage lenders who has no waiting period after Chapter 7 bankruptcy discharge date.
- I can get you the loan to value and tentative interest rate probably tomorrow.
If your discharge date is May 2026, you’ll be considered “day-one out.” While your choices may be more limited at first, you still have several programs to consider as you move forward.
- Owner-Occupied Refinance Maximum LTV
In the first 12 months after your bankruptcy ends, you can usually borrow up to 65 to 70 percent of what your property is worth.
Between 12 and 24 months after your bankruptcy ends, the maximum amount you can borrow compared to your property’s value usually goes up to 70-75%.
After two years, you might be able to borrow as much as 75 to 80 percent of your property’s value.
If your property is valued at $260,000 or more, you’ll generally be eligible for the highest loan-to-value ratios mentioned above.
- Most Non-QM lenders want a credit score of at least 580-620 for these programs. If your score is 643 or higher, you might get better rates and more choices.nd options.
- Co-Borrower with Stronger Credit
Having a co-borrower with better credit can help, but each lender has different rules. Some use the lower middle credit score, others use the higher one, so check with each lender before applying.
- For closing costs, many Non-QM lenders let you add them to your loan if you stay within the allowed loan-to-value limit. But remember, there might be extra rules after bankruptcy.
My Honest Advice
Since your bankruptcy ends in May 2026, your first choices might be limited, and interest rates could be higher. But there are several strategies you can use. The following tips may help you plan your next steps. Find someone who knows many lenders and can apply on your behalf.
- Ask about ‘day-one BK’ or ‘bankruptcy seasoning’ programs.
- Obtain an appraisal early to know your LTV.
- Consider if waiting 6-12 months will lead to better terms.
- Ask a lender to contact you once you discharge.
While this information is not a replacement for professional financial advice or brokerage services, it is intended to serve as a helpful starting point for your research. If you’d like help reaching out to Non-QM brokers or need more resources, feel free to ask.
NON-QM Loans After Bankruptcy And Foreclosure
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This reply was modified 2 weeks, 6 days ago by
Sapna Sharma.
gustancho.com
NON-QM Loans After Bankruptcy And Foreclosure
NON-QM Loans After Bankruptcy And Foreclosure, NO waiting period requirements, 30% down payment, no PMI, no minimum credit score
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I have been trying to save my parents property since there death. I filed Bankruptcy, but it was discharged. I was unable to financially keep it but now it’s on my credit, is there hope for me?
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Yes, there is hope. You’ve probably heard that a discharge in bankruptcy means the end of the world for you. Fear not! Discharged bankruptcy usually falls off your credit report after 10 years (for Chapter 7) and after 7 years (for Chapter 13). Debts of deceased parents are paid from the estate and are not paid by family members, unless you are in some way legally or financially responsible for them.
What This Likely Means
If the property has become unaffordable and been lost, the main problem is usually not the bankruptcy discharge, but the mortgage, tax, probate, or foreclosure (and so on) related to the property. A bankruptcy discharge eliminates your personal liability to that debt, but it will not (in most cases) stop a lien from a secured debt or stop a creditor’s right to foreclose on the property that is related to the secured debt. If that property is still in the picture, the answer could greatly vary based on whether you inherited the property, the mortgage that may (or may not) be on it, and whether the probate is still open.
How to Check Your Position
- First, take a look at all 3 of your credit reports. Confirm that the discharged accounts are reported accurately.
- Confirm whether the bankruptcy was Chapter 7 or Chapter 13, because the reporting period and options differ.
- Check the probate or estate status for your parents’ property, because debts and title issues are often handled through the estate.
- If there is a mortgage lien, remember that bankruptcy usually does not erase the lien itself.
What to Consider Now
If your bankruptcy has been discharged, you can still repair your credit in hopes of qualifying again. This will require creating new accounts to keep current and creating a positive payment history. A new mortgage may not be approved right after a bankruptcy, but some loan programs may be offered after the required waiting period or in limited exceptions. If there is a negative credit report, you can file a dispute to show the balances as discharged.
What to Do Next
The first priority now is to determine whether you want the information on the house, the debt associated with it, or the bankruptcy credit report. Would you like the next steps based on whether this was a Chapter 7 or Chapter 13 case, and whether the estate is still in probate?
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