Stewardship Capital

Buying After a Credit Event

Bankruptcy, foreclosure, short sale, deed in lieu. These things happen. A job loss, a health bill, a divorce or a tough market can do it. A credit event does not mean you can never own a home again. This page explains how lenders look at it and what can help.

Events coveredBankruptcy, foreclosure, short sale and deed in lieu.
The waiting periodIt differs by loan program and by the type of event.
What helpsOn-time payments since, steady income and your story.

Can I buy a home after a bankruptcy or foreclosure?

Often, yes. Most loan programs ask you to wait a set time first. Then they want to see that your credit is back on track. Every program has its own rules, and no one can promise an approval. But many people buy again, and Stephen is glad to help you plan.

What do these credit events mean?

  • Chapter 7 bankruptcy: Many debts are wiped out, which is called a discharge.
  • Chapter 13 bankruptcy: You pay back part of your debt through a court-approved plan over time.
  • Foreclosure: The lender took the home because payments were missed.
  • Short sale: The home sold for less than was owed, with the lender's okay.
  • Deed in lieu: You gave the home back to the lender to avoid foreclosure.

How long do I have to wait?

It depends. The waiting period differs by loan program, such as FHA, VA, conventional or non-QM. It also differs by the type of event and, for bankruptcy, by whether it was Chapter 7 or Chapter 13. The clock usually starts from a key date, such as a discharge or a completed sale.

Some programs may allow a shorter wait if the event came from something outside your control, and you can document it. Some may even consider a borrower who is still in a Chapter 13 plan, with permission from the court or trustee and a record of on-time plan payments. Guidelines change, so Stephen checks the current rules for your file.

Are a short sale and a deed in lieu treated like a foreclosure?

Not always. Programs may treat each one differently, and the waiting periods can differ too. Stephen can look at your event and tell you which rules apply.

What do lenders want to see after the waiting period?

They want to see that things have changed. That usually means:

  • On-time payments on rent, bills and any new accounts
  • Steady income
  • No new missed payments
  • Savings, even small ones

Lenders also ask for papers about the event, such as bankruptcy discharge papers, court or trustee letters, or foreclosure and short sale records. A short letter explaining what happened is common.

What can I do now to get ready?

  • Look over your credit reports and flag anything that looks wrong.
  • Pay every bill on time, every month.
  • Keep credit card balances low.
  • Save what you can, even a little.
  • Hold off on opening many new accounts.
  • Keep your paperwork from the event in one folder.

Does my story matter?

Yes. Lenders want to know what happened and what is different now. A job loss that is over, a medical bill that is paid or a divorce that is settled can all be part of a clear, honest explanation. There is no shame in it. Stephen has helped people at every stage of this road.

What if I am not ready yet?

"Not yet" is not "no." Stephen can lay out a plan with a rough timeline, so you know what to work on first. Veterans can also ask about the VA loan rules, which differ from other programs. When you are ready to shop, our buy a home page shows how we work, and our seller concession limits page explains how seller help can work.

Frequently asked questions

Will a credit event keep me from ever getting a mortgage?

No. Most programs set a waiting period and then look at how your credit has recovered. Approval is never promised, but many people buy again.

How long after bankruptcy can I buy a home?

It depends on the loan program and on whether it was Chapter 7 or Chapter 13. Stephen checks the current rules for your situation.

What is the difference between Chapter 7 and Chapter 13?

Chapter 7 wipes out many debts through a discharge. Chapter 13 sets up a plan to repay part of your debt over time. Lenders may treat them differently.

Can I buy a home while I am still in a Chapter 13 plan?

Some programs may allow it, usually with a record of on-time plan payments and permission from the court or trustee. It varies, so ask Stephen.

What papers will I need?

Commonly the discharge or court papers, any trustee letters, records of a foreclosure or short sale, and a short explanation letter. Stephen gives you a list for your file.

Start with a calm conversation

Tell Stephen what happened and when. He will explain where you stand, what to work on and what a path forward could look like.

Talk with Stephen

This is not a quote, a commitment to lend or an offer of credit. Stephen Chakerian, NMLS #2193331 | Stewardship Capital, a team of Barrett Financial Group, L.L.C., NMLS #181106 | Equal Housing Opportunity.