It all began with a bright outlook on life. Jason had a great job, a fast car, lovely furniture, and what seemed like the start to a happy future. Then the unexpected happen, and Jason’s happy life got filled with medical bills and sleepless nights.
The “unexpected” seems to happen to even the best of us. As a result nearly 730,000 cases of chapter 7 bankruptcies were filed in 2013. That is why it is so important to be educated about bankruptcy, and to know your options after going through one. I’m not a lawyer so I won’t attempt to give you legal advice, but I can share some helpful knowledge about how to get a home loan after going through this kind of stressful situation. Being from a company of US Veterans that primarily serves veterans, I’ll discuss bankruptcies and how they work with the VA home loan.
The requirements for getting a home loan vary depending on who is looking at your loan application. The VA has specific guidelines that they expect applicants to meet. In the case of a bankruptcy, the VA requires borrowers to wait one year. In order to qualify with the VA after only one year, the bankruptcy needs to have occurred primarily due to medical expenses, and the situation needs to have been beyond the borrower’s control. For example, the borrower can’t have a gambling related bankruptcy and feel entitled to a VA loan after only one year.
Even if a borrower does meet all the criteria of the VA, that still doesn’t guarantee them the right to a loan after a bankruptcy. The VA does not actually lend any money, they simply offer some security to a bank by guaranteeing a portion of the loan amount, making the lender feel more comfortable about lending a veteran money for a home.
Banks and Lenders
Banks and lenders have what are called overlays. These are guidelines that go above and beyond what the VA requires from the borrower. Most banks will not consider a borrower for a mortgage until two years after the discharge of the bankruptcy.
In order to get a VA home loan, you need to meet all the minimum requirements of both the VA and of the lender you are using. If you use a mortgage broker, they can help you select the lender with the overlays that work best for your situation.
It is important to not only look to the past, but to the future. If you have recently gone through a bankruptcy you should be thinking ahead and begin building new credit. Keeping an eye on your credit report and score is a very good habit to have. With bankruptcy, most if not all your creditors should no longer have claim to your money. Unfortunately, sometimes it takes a long time to get creditors to stop reporting collections. You may need to actively address the discharged collections to clean up your credit report and ultimately improve your score. In some cases you may even need to seek out advice from an attorney.
You should also consider opening a secured credit card to begin a history of responsible credit usage. Please understand that for lenders, bankruptcy can be viewed as your one “get out of jail free card.” It is very important that you do not get any new 30 day late payments or non sufficient funds notices.
Please remember that what happened to Jason can happen to anyone. If you find yourself in a similar situation, don’t feel ashamed, just move forward and begin planning for the future by preparing today.
Vancouver, WA – The owner of a local mortgage company now has a new hairdo. Kerry Greenwald is sporting an edgy purple Mohawk to help kids of military families.
Kerry challenged his employees, friends, and family to raise $2000 for The Oregon Summer Star Program. The program teams up with Operation Purple to sponsor summer camps for kids with active duty military parents.
In return for meeting his challenge, Greenwald pledged to match the $2000 and promised to cut his hair into a purple Mohawk.
Greenwald fulfilled his commitment after a pre-celebration BBQ. He sported his new purple Mohawk as he handed over a check for more than $4250.
The Pacific Northwest is home to nearly 98,000 active duty and military civilians who are often deployed for months at a time, each potentially leaving behind a spouse and children.
The Oregon Summer Star Program (partnered with Operation Purple) is a summer camp for children of our active duty military. The camps are structured with a military theme to help children relate to their parents service in a fun and exciting way.
“I grew up in the military and eventually joined the Army. As a kid growing up in that kind of environment, it would have been very helpful to get the same kind of experience that Operation Purple and the Oregon Summer Star Program now offer. “, said Greenwald.
More information about this event can be found at www.donationto.com/Operation_Purple
What came first, the chicken or the egg? I’m not here to argue with you because obviously it was the chicken, but that’s beside the point.
When it comes to buying a home, the question is often asked, what comes first, the financing or the home search? While the answer to this question is not nearly as controversial as the chicken and the egg, it is one that not everyone fully understands. Fortunately there is a more definitive answer.
Once you decide you’re in the market to buy a home, it’s time to look at financing. Many people make the mistake of starting to look for a home before they know how much they qualify for. Fate would have it that these people find the home of their dreams and want to make an offer on it, but they run into two obstacles. First they don’t know if they can even qualify for it, and the second is they don’t have that very important pre qualification letter.
Knowing how much you can afford is vital to the home buying process. I may fall in love with a $1.5 million house, but no matter how many blog posts I write, I’m never going to be able to scrape together enough money to qualify for that. How do I know that? I recently bought a home and was able to see exactly how much I qualified for...and I was short more than a couple dollars for getting my dream mansion.
The pre qualifying process helps many borrowers begin to understand their own ability to repay a loan. It’s an opportunity to look over your major expenses and have a professional show you what your debt to income ratio is, and look at other factors that are used to determine eligibility. Something many people don’t think about is that a prepared borrower is important to sellers.
Currently sellers are generally getting multiple offers on their homes, which means they have the blessing of being selective. If a buyer wants to make an offer on a home and they don’t have a pre qualification letter, they might as well kiss their offer goodbye. The seller doesn’t want to waste his/her time with offers that don’t have any foundation to stand on because there is a larger possibility of the deal falling apart. When the seller hasn’t made it through the first phases of getting approved, it says something about their level of commitment to purchasing the home.
After you have received the green light from a lender, you can start searching for a home with confidence. You’ll know that your finances are in order and so will the seller, which makes everyone happier, especially the chicken.