After a bankruptcy or foreclosure, getting approved for a VA home loan is never simple. You have a few choices as a veteran or service member of the United States. Unfortunately, many of those doors will be blocked if you have already experienced financial issues. Fortunately, regaining eligibility for your VA home loan benefits after bankruptcy is still feasible with a VA approved lender like HomePromise following your discharge date or the so-called seasoning period.
You will find all the information you require in this article to set your home-buying (or refinancing) goals back on track. An exciting new chapter is about to begin.
What Do VA Home Loans Entail?
The United States Department of Veterans Affairs, sometimes known as the VA, is a federal organisation that has existed since the 1940s, however changes have unavoidably been made through time. The VA administers the VA home loan. It offers financing options with no down payment necessary in order to assist qualifying spouses, serving military personnel, and veterans with their real estate acquisitions.
The VA programme enables qualified candidates to purchase a range of real estate types, including single-family homes, condominiums, and multi-unit buildings. Over the years, hundreds of thousands of veterans have taken advantage of the programme, which provides financing of up to 100%.
In general, the VA financing programme is one to consider if you have military experience when trying to buy a property – independent of personal circumstances.
Get a VA Loan After Filing for Bankruptcy
You cannot avoid the fact that a prior bankruptcy will negatively impact your financial situation in a number of ways. Although there are many other factors to take into account, FICO credit score studies reveal that bankruptcy and foreclosure both cause a 120 point decline in credit scores on average. This can limit your alternatives in a variety of circumstances, particularly when it comes to financing the acquisition or refinancing of real estate.
Many conventional kinds of borrowing will be prohibited, and even VA loans can be challenging to obtain. Even though the situation is painful, there may still be a way to get VA loans.
Even if you haven’t had any prior financial issues, there are a number of standards that must be met in order to qualify for a VA loan. The type of bankruptcy that was filed will have an impact on the scenario if bankruptcy is a factor.
You must wait two years after discharge if your bankruptcy was a Chapter 7 before you may qualify for a VA loan. Additionally, you’ll need to provide a thorough justification for the bankruptcy and demonstrate that your financial situation has improved. Even while the credit score doesn’t have to be flawless, it’s still necessary to demonstrate that the damage has been fixed. However, in some circumstances, a VA loan may be approved even if your bankruptcy was only one year old. Whether or whether this is achievable will depend on the cause of the bankruptcy. Some VA lenders may approve you for a VA loan even with a Chapter 7 bankruptcy discharged if it can be demonstrated that your bankruptcy was caused by extenuating circumstances beyond your control.
You must still fully explain the circumstances in Chapter 13 bankruptcy cases. However, there is no waiting period for a Chapter 13 bankruptcy following discharge, unlike the two-year requirement.
You will almost certainly be approved for a VA loan once those requirements are met. This provides you the same chances that every other veteran has, which is what you are entitled to after serving your country. You might move into your new home much sooner than you anticipated, assuming the application is processed correctly by an experienced VA lender.
What actions can you take to get ready for a VA loan?
There are a few things you may do to assist as the possibility of applying for a VA loan looms on your schedule. This list should be very helpful:
- Acquire a free annual credit report.
- Verify that any incorrect or out-of-date information is updated.
- Prior to submitting your loan application, keep up with your monthly obligations.
- Try to refrain from making more credit-based purchases.
- By building up your savings, you may demonstrate that you are currently in a secure situation.
If you take care of each of those, your chances of obtaining a VA loan after bankruptcy will be higher than before. In addition to assisting with Chapter 7 or Chapter 13 bankruptcy issues, it typically strengthens your loan application.
Obtaining a VA Loan
Getting ready for a VA loan is one thing; actively applying for one in the most effective way is quite another. Finding the finest VA lender to make those homeownership dreams a reality is surely at the top of the list of questions that need to be addressed.
Prior to submitting your loan application, you must select a VA lender who can assist you in getting the VA mortgage you require. It is just unacceptable to choose one that will require you to wait for 3, 4, or 5 years following discharge. You should seek out a lender that can both secure the lowest loan rates and is supported by the government’s VA programme.
While receiving quick, convenient service is always advantageous, it should also be a priority to know that your data is being protected at all times. But perhaps most crucially, you should be aware that the application is backed by a group of professionals who can assist you at every level, including by providing assistance with bankruptcy recovery.
With HomePromise, you can count on getting all of the aforementioned benefits as well as personalised support from a group that is aware of your unique circumstances. We are looking out for your best interests because we are veterans and have experienced bankruptcy. Ours is the only service you’ll require to obtain your VA loan because we offer free estimates and no up-front costs. Whether or not you have had financial hardships, that is true.
Final Reflections
You deserve to live a comfortable life as a veteran of the US military. By purchasing a house or refinancing your current home with appropriate VA financing. You should not let past financial difficulties, including bankruptcy, stand in the way of creating a stable home situation.
Our team is more than willing to help you at every stage of the process. If you need assistance financing your home after bankruptcy with a VA loan.