Given the the economic crisis that occurred from 2008 through 2011 it’s not uncommon for some families to have experienced financial hurdles. Many of the nation’s largest employers (such as Ford, General Motors, AIG, and others) didn’t have enough capital to weather the storm and were forced to take on new loans or bailout money to stay afloat. Unfortunately many of these employers were forced to cut costs in order to receive assistance, which in turn resulted in widespread layoffs throughout the US during this time.
Many families and individuals lost their primary source of income due to these layoffs and as a result were forced to file for bankruptcy, lost their homes to foreclosure, and/or became delinquent with their creditors. It is a common misconception that these people can no longer secure home financing but this isn’t true in many cases. Below are some basic guidelines to qualifying for a home loan if you’ve been one of the many people who’s had financial difficulties in recent years:
▸ Bankruptcy: Depending on the loan program the time frame that must elapse before you are able to eligible for financing again ranges from 2-4 years, and even this can vary depending on the filing status (i.e. Chapter 7, Chapter 13, Chapter 11, etc.)
▸ Foreclosure: Depending on the loan program, the circumstances involved with the foreclosure (such as whether the foreclosure was included in a bankruptcy or not) can determine if you qualify for financing and if so how long the waiting period is.
▸ Disputed Accounts: Disputed accounts are NOT included in the calculation of your credit score (they are ignored by the credit bureaus) and as a result your true qualifying credit score cannot be obtained until these accounts are no longer showing the “disputed” status on your credit report. Depending on the type of dispute, the status, balance, age and a few additional items the status of such a dispute can affect your eligibility and/or at least add an additional hurdle in being able to qualify.
The above are some of the most common derogatory elements that are seen in today’s real estate lending environment. To better help you understand what you can do to qualify for home financing in the future I would highly recommend you reach out to a qualified mortgage professional. Depending on the circumstances you might find the information you receive more positive than you think.
Thanks for reading!