Having the lowest possible housing costs may help Texas homeowners who recently filed for bankruptcy keep their finances under control. Although it might have been impossible to refinance before the bankruptcy, lenders often offer refinancing options to those who have either discharged their debts through Chapter 7 or reorganized them through Chapter 13.
The length of time between filing and being able to qualify for a new loan depends on the type of mortgage product a homeowner needs. For example, in order to refinance an FHA or VA loan, homeowners only need to wait two years after the discharge of a Chapter 7 bankruptcy. Homeowners who file for Chapter 13 bankruptcy protection have to make 12 payments in order to qualify for an FHA loan or wait one year from the filing date to apply for a new VA loan.
Generally, people who file bankruptcy need to wait four years before they qualify for a conventional loan. However, in some circumstances, a potential borrower may be able to get approved in as little as two years. There also may be some lenders who will offer to finance a loan sooner but at a higher rate. People who intend to refinance their home after bankruptcy might begin taking steps to rebuild their credit right away so they have the opportunity to qualify for the best rate when they are eligible.
Bankruptcy may be a viable option for those who are unable to pay all of their financial obligations with their current resources. An attorney who focuses on debt relief could help clients determine whether Chapter 13 or Chapter 7 might be beneficial for them. After a bankruptcy, it may be possible for people to repair their credit and qualify for a home loan in four years or less.