Financing With Poor Credit

Financing With Poor Credit

As the economy recovers from the 2008 housing crash, lots of people are emerging with a less than desirable credit situation on their hands. Here are some by-the-numbers guidelines of when and how to obtain a new mortgage and, as a result, repair your credit and heal yourself both financially and emotionally.

Waiting Period

It can be really painful to think back to a time in your life when your finances were less than perfect. Losing a home because of bankruptcy, foreclosure, or short sale can be the most nerve wracking and insecure times of your life, but remember to keep in mind that so many people went through a similar situation when the 2008 crash happened because of all the underwater mortgages.

Though any blemishes on your credit will remain on your credit report for seven years (or ten years for a chapter seven bankruptcy), the waiting period after you have a poor financial situation is different based on what the situation was and what type of loan you’re trying to obtain.

Chapter Seven Bankruptcy

After filing a chapter seven bankruptcy, you must be discerning about what type of loan you try to obtain. You can get an FHA or VA loan after two years, a USDA loan after three years, or a conventional loan after four years, depending on the status of your credit health.

Chapter 13 Bankruptcy

You can obtain an FHA, VA, or USDA loan while going through the chapter 13 bankruptcy process, as long as you’ve made 12 months of satisfactory payments on your bankruptcy. If you receive a chapter 13 discharge, you can obtain a conventional loan two years later, but if it is not discharged you must wait four years.


You can obtain financing for an FHA, VA, or USDA loan, you must wait three years after your previous foreclosure. For a Fannie Mae or Freddie Mac loan, you’ll have to wait a cool seven years before you will qualify. Conventional loans vary – you should check with your lender. If you choose to sell on a short sale to avoid foreclosure, you can get another FHA, VA, or USDA loan immediately, but you’ll have to wait two years before you can apply for a Fannie Mae or Freddie Mac loan.

Avoid Credit Blunders

To avoid a credit blunder to begin with, you may consider reaching out to a real estate investment firm. They can offer cash for your home and allow you to pay off your mortgage without the danger of a bankruptcy, foreclosure, or short sale.

Contact Redondo Mortgage Center to learn more about how an investment firm can change the course of your home buying and selling experience. Visit us online at

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