Just after a bankruptcy, thinking of debt and that, too, a huge debt like a home loan can be extremely difficult. To ensure there is some impact or seriousness amongst the borrowers while borrowing and defaulting does not become a trend leading to bad loans for the lenders, there are some important rules that restrict new loans after bankruptcy. Some restrictions may be for 10 years as well. While the other restrictions might be the impact of declaring bankruptcy. To accurately evaluate and thread cautiously across these restrictions, you may need the best consultants in town in Los Angeles, Dallas, TX. You can connect with them by logging on to https://www.recoverylawgroup.com/bankruptcy/.
What are some of the common restrictions?
- There might be a seasoning period or waiting period to avail different types of loans once a borrower applies for bankruptcy via Chapter 7. As per current rules, there is a waiting period of 4 years for a personal loan, 3 years for US Department of Agriculture home loans (A government scheme for cost-effective home loans), and 2 years for FHA mortgages (another Federal scheme that is insured by the government).
- In the case of Chapter 13, there are two dates to keep in mind while considering the seasoning period. One date is when the restructured payment plan is approved and must be implemented. The other date is the date when the restructured payment plan ends. All the exemptions are applicable only if the restructured payment plan is followed consistently without any deviations. For a personal loan, the waiting period could be 4 years from the discharge date or 2 years from the date the payment plan is completed (whichever comes earlier). The waiting period would be 1 year for USDA loans as well as FHA loans.
- The waiting period and other restrictions just balloon if a person has applied for bankruptcy twice in a period of 7 years. There is a minimum waiting period of 5 years for any kind of home loan if a filer has filed for bankruptcy twice in 7 years.
What is the walkaround?
The walkaround is a bit risky and might sound shady as well. Higher interest rate lenders look for potentially weak people and lend at stringent terms. That could mean interest-only payments and no equity in the home for some time, a requirement for larger down payments or lumpsum payments every couple of years. There might be scenarios where the loan tenure can exceed even 30 years, which is certainly not advisable.
What is the best solution?
The best solution in Los Angeles, Dallas, TX would be to dial 888-297-6203 and connect with experts for professional and reliable advice. Apart from this, taking small loans, like a car loan and repaying on time, and waiting for the seasoning period to pass, can help in getting affordable mortgage loans at reasonable terms.