According to a new
study from Lending Tree,
Americans who have filed for bankruptcy may be able to rebuild enough credit to
qualify for a home loan in as little as 2-3 years.
This is in stark contrast to the belief that many have that they need to
wait 7-10 years for their bankruptcies to clear from their credit reports
before attempting to apply for either a mortgage or a personal or auto loan.
The study analyzed over one million loan applications for mortgages,
personal, and auto loans and compared borrowers who had a bankruptcy on their
credit report vs. those who did not to find out the “Cost of Bankruptcy.”
The study found that 43.2% of Americans who filed bankruptcy were able to
repair their credit back to a 640 FICO® Score in less than a year. The
percentage of those who achieved a 640 FICO® Score increased to nearly 75%
after 5 years. The full breakdown of the findings was used to create the chart
below.
Americans who were able to repair their credit scores to a range of 720-739
within three years of filing were able to obtain the same financing options as
those who had never filed bankruptcy.
According to Ellie Mae’s latest Origination Insights
Report, 53.5% of those who were approved for a home loan had FICO®
Scores between 600-749 last month. This is great news for Americans who are
looking to re-enter the housing market.
Raj Patel, Lending Tree’s
Director of Credit Restoration & Debt-Related Services had this
to say:
“People may think that
filing a bankruptcy would put you out of the loan market for seven to ten
years, but this study shows that it is possible to rebuild your credit to a
good credit quality.”
“LendingTree’s research
found that very few bankruptcy filers have a harder time [obtaining a mortgage]
than those who have not filed for bankruptcy.”
Bottom Line
If you are one of the millions of Americans who
has filed for bankruptcy and think that you have to wait 7-10 years to make
your dream of returning to home ownership a reality, lcall us today and we will refer you to in our opinion "the best mortgage office" North of Boston in Essex County on the North Shore.
THE MILITELLO TEAM
(978) 815-3877 - Joseph
(978) 500-1480 - Kathleen
Vice-President/Realtor
