How long do I have to wait to be qualified for a mortgage loan when I have a derogatory account?
Derogatory accounts such as foreclosures, short sales, deed in lieu of and bankruptcy will have a major negative impact on your credit score and usually decreases your credit score about 200300 points. Depending on how old they are and what you have done to establish good credit since then, you may or may not be qualified for a mortgage loan. To find out about your specific situation; what you need to do and/or how long you have to wait to qualify for a mortgage loan, talk to your favorite lender. The table below answers the question concerning people who have had a foreclosure, short sale or bankruptcy. The question is when will they be able to qualify for a mortgage loan. The answer is shown below:
Table 1: Waiting Period after Foreclosure, Short Sale, Bankruptcy, and Deed
in Lieu Of, etc: Derogatory Event Bankruptcy - Chapter 7 Bankruptcy - Chapter 1 3 Foreclosure Deed In Lieu Of Foreclosure / Short Sale
FHA*
CONV**
V A***
2Yrs
4Yrs
2 Yrs
1 Yr
2 or 4Yrs**
1Yr
3Yrs
7Yrs
2 Yrs
3Yrs
2 Yrs - 80% LTV 4 Yrs - 90% LTV
2 Yrs
*http://www.fha.com **https://www.efanniemae.com***http://www.veteranloancenter.com
During the Waiting Period you should not have any of the following events: • No more than 2 installment or revolving debt payments 30 days past due in the last 24 months. • No installment or revolving debt payments 60 or more days past due since the discharge/completion date of BK (Bankruptcy). • No housing debt payments past due since discharge/completion of BK (Bankruptcy). • No new public records BK (Bankruptcy), foreclosure, deeds-in-lieu, unpaid judgments/collections, garnishments, liens since discharge/completion of BK (Bankruptcy). • Evidence that borrower's credit history does not contain multiple revolving accounts with high balance to limit ratio or high overall utilization of revolving credit.