Can I Qualify for a VA Loan if I’ve Declared Bankruptcy in the Past?

If you are a member of our armed forces, a veteran or the surviving spouse of a veteran you may already know that you can qualify for a VA loan, backed by the Department of Veterans Affairs. If you’ve ever declared bankruptcy though, you may be concerned about whether or not you will still qualify for a VA loan.

The good news is that yes, you can still qualify for a VA loan if you have declared bankruptcy in the past. In order to qualify for a VA loan, your home loan will need to have been at least one year from the date of your Chapter 13 bankruptcy or two years from the date of your Chapter 7 bankruptcy. Additionally, you must have had no late payments reported to the credit bureaus since emerging from bankruptcy.

What are the benefits of a VA loan over a conventional mortgage loan?

VA loans offer more flexible loan criteria, meaning that individuals who may not qualify for conventional mortgages due to limited credit history, bankruptcies or low credit scores may still qualify for VA loans! VA loans also have no money down options rarely found today with conventional mortgage loans.

How do I find out how much loan I can afford?

Your lender will help you to determine how much you can afford, based on your income, assets and debts and your credit history. If you are married and your spouse works outside the home, they can co-sign on your VA home loan, which may increase the amount you will qualify for as a family.

Will I need to put money down on a VA loan?

Another advantage of VA loans over conventional mortgage loans is generally no down payment will be required. A VA loan can cover up to 100% of the purchase price of your new home. While no down payment is required, you may still be required to pay standard closing costs which your lender will estimate for you. A seller can cover closing costs for both parties though, so it is possible to get into your new home with no out of pocket mortgage loan expenses! Talk to your lender about negotiating with the seller’s agent to cover closing costs, decreasing the expense you’ll face in your search for your new home.

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