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Non-QM Loans After Bankruptcy With No Waiting Period
This topic on non-QM loans after bankruptcy with no waiting period requirements is mainly addressed to Michelle McCue. Michelle, it has been a while since I kept up to date on non-QM guidelines on mortgages after bankruptcy and foreclosure. Do you know the credit score, down payment, credit requirements, and waiting period on non-QM loans after bankruptcy or bankruptcy?
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11 Replies
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Gus,
This is a great question. We have programs with no waiting period after discharge from both a Chapter 13 or Chapter 7 bankruptcy. Scores can be as low as 550 at one of our lenders, which is amazing. It gives so many families the ability to rebuild after a housing or credit event.
Lenders will require at least one tradeline open for 24 months, or three tradelines open for 12 months. Down payment will vary based on score and debt to income ratios. We even have options that do not require a debt to income ratio or income documentation,
The options post bankruptcy are abundant if you have the right advocates.
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Down payments vary by program. We have bank testament loans that allow 10% down with a score over 740.
15% down payment is possible as low as 660
Scores down to 550 require 35-40% down, which may sound daunting, but many families are fortunate enough to have a strong equity position in their current home, or savings. We can thankfully utilize their strong position to move them forward.
We can even use our non-qm programs to work around recent mortgage lates. Alternative programs are a great tool!
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20% is feasible but a larger down payment is when it becomes an issue.
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A Chapter 13 payment history can not be use for non-qm, but it is certainly used for FHA & VA.
Many borrowers are surprised they may have a tradeline still open from before the bankruptcy. Many have an account such as an auto loan paid outside the BK plan. We have can help document that if that is the case. If not, we can work with the borrower to secure tradelines. Call us, we can walk you through the process of opening secured cards and credit building accounts and increasing your scores.
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Do petitioners apply for secured credit cards during Chapter 13 bankruptcy? I heard they cannot have credit period.
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I think securing tradelines via secured card or credit building accounts is a great way to rebuild during bankruptcy. I find Self, Applied Bank and Credit strong to be particularly easy to work with.
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Michelle, is Carrington the only wholesale Lender that does late mortgage payments in the past 22 months?
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Carrington has the most forgiving program for mortgage lates. They allow rolling 30 & 60 day lates. They will even allow 90 days. It really an incredible program that gives families a second chance.
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Michelle, many folks just sold their home and need a mortgage for another home to purchase but have had a late payment on their housing payment in the past twelve months and cannot get financing. I know Dan from :Carrington is doing late payment in the past twelve months on mortgage lates. Are there any other wholesale lenders that cater to borrowers with late mortgage payments in the past twelve months>
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As of this moment no one else is doing these loans as well as Carrington. Oak Tree is entering the market, but it is not an easy process. FGMC used to do these loans, but they have exited the market completely.
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Wow. These are great loan programs. If it were not for Carrington, many homeowners could not buy a house after selling their home if they have late mortgage payments in the past twelve months. Thanks Michelle.