All mortgage loan programs have mandatory waiting periods after bankruptcy and foreclosure and VA (Veteran’s Affairs) loans are no different and we will get into the 2016 VA Guidelines After Bankruptcy in this article. To start with, just because a borrower has had a bankruptcy or foreclosure, doesn’t mean that they cannot obtain a loan, but as with all programs, some guidelines and waiting periods must be followed. Now the common misconception is that a borrower is out of luck and doomed after going through a bankruptcy or foreclosure, this is not the case. Yes, it will set you back, but the damage is not permanent and you can qualify for a mortgage again. The first thing that is damaged is a borrower’s credit as it can be brought down by 100-150 points easily and quickly. Yes, this will negatively affect your borrowing options in the short-term, but if you allow time to pass, the farther removed you are from this event, the less power it will hold on your credit report and your score will begin to rebound even if you do nothing else to benefit your credit. The fact of the matter is that time is used to heal all old wounds and the older they are, the less they will hurt. Now if you want to try and streamline the process to gaining credit worthiness, you need to try and obtain new debt you can afford and pay on a timely basis. There are plenty of credit card companies that will extend credit to you as well as auto lenders who will as well. Just make sure you can satisfy all the new debt you decide to take on.
As I started getting into this earlier, yes, your credit score is going to get hammered after going through bankruptcy and foreclosure, but you can’t just sit around and not do anything if you wish on getting a home in the future. You need to be proactive and look for ways to re-establish your credit. You cannot sit back and think your world is ending because you will have a lot of options and if you make the right decisions, this will help in getting your credit repaired. The first thing you are going to want to do is look for getting credit. Believe me, there are companies out there that will extend credit to anyone, even if you are only a day out of declaring for bankruptcy. You do not want to think that cash is the only option you have for purchasing as this will not help you in building positive items onto your credit. Most credit cards will begin with giving you a credit limit of $1,000 or so and just think that the larger it gets, this is even better for you. If you stay current with your payments you will see your credit increase as well as the credit limit. Speaking from a personal situation, after 1 year from bankruptcy I had a credit card with a $4,000 limit and I regained 95-100 points to my credit out of the 150 I lost prior to my financial hardships. Believe me, you can rebound and rebound quickly. Yes, this bankruptcy or foreclosure will stay on your credit for 7 years, but you can slowly make creditors forget about that with credit worthiness and positive marks moving forward.
Alright, we have gone over declaring bankruptcy and foreclosure and how it affects your credit, now we are going to go over the waiting periods needed before you can get approved for a loan. To begin with, if you declared a chapter 7 bankruptcy, according to 2016 VA guidelines, you must wait at least 2 years from the discharge date of your bankruptcy before you can obtain a loan. In comparison, this is the same waiting period as an FHA loan and less than the 4 years require by conventional loans. Another positive of getting a VA loan after bankruptcy is that VA loans will not see an increased interest rate because of the bankruptcy and will only be concerned with your credit score. Another quality of VA loans that is attractive is they allow you to put $0 down, so if you are a veteran, this is definitely the right loan program for you. VA loans have similar qualities to FHA loans in the sense that both loans are insured by government entities. VA loans are insured by the US Department of Veteran Affairs while FHA loans are insured by the Federal Housing Administration.
Just like declaring bankruptcy, the waiting period after a foreclosure, deed-in-lieu of foreclosure, or short sale is also only 2 years in terms of a VA loan. This differs from FHA requirements where the waiting period is 3 years after foreclosure, deed-in-lieu of foreclosure, or short sale. What is worse is the waiting period by Fannie Mae and Freddie Mac which requires a 7 year waiting period after foreclosure. You can definitely see why getting qualified for a loan by a government sponsored entity is the way to go. In this situation, the government has more relaxed terms regarding negative items in your credit history while conventional lenders will hold this against you for years to come.
In conclusion, if you are a Veteran and believe you can qualify for a loan, I am definitely the guy to see if we can get you approved. I am available 24-7-365 and can be reached at 888-900-1020 or by email at firstname.lastname@example.org. There is nothing better than assisting Veterans that have fought for this country and I want to make sure I fight for them when they need my assistance. Please call or email me any time and we can get you in the home of your dreams or at least develop a plan to get you back on your feet and approved in no time.