Mortgage Glossary
Bankruptcy
Defined by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
Bankruptcy is a legal process for discharging or reorganizing debts that creates a waiting period before a new mortgage.
What Bankruptcy means
FHA and VA generally require two years after a Chapter 7 discharge; conventional requires four. Chapter 13 may allow buying during the plan with trustee approval.
Florida example
A Florida buyer two years past a Chapter 7 discharge, with rebuilt credit, qualifies for FHA financing. Re-established tradelines and on-time payments make underwriting comfortable with the recovery.
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