How to Get a Home Equity Loan After Bankruptcy

Taking out a 2nd mortgage or equity loan after a bankruptcy are great home financing tools for borrowers to rebuilding credit; get cash out and save money by consolidating debts. Consider taking out a new home equity loan even if you have a past BK, foreclosure or simply low credit scores.

We help homeowners get back on track by refinancing adjustable rate debts and consolidating revolving credit that often help significantly by increasing the fico scores within a few months.

Take advantage of our expanded Non QM loan programs and apply for a bad credit home equity loan today. BD Nationwide can help you locate lenders and banks that provide home loans after bankruptcy.

Get Approved for a Home Loans After Bankruptcy

Experiencing bankruptcy may result in a diminished credit score, but you can still meet the criteria for a home loan by offering lenders reassurance of your commitment to repayment. To enhance your eligibility to be pre-approved for a home equity loan, focus on rebuilding your credit, crafting a letter of explanation, and reducing outstanding debt.

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See Lenders for Terms and Conditions

Upon obtaining a bankruptcy discharge, all previous unsecured debts are eliminated, thereby enhancing your capacity to settle any new debts. It is essential, however, to exercise prudence regarding your financial circumstances and ensure that your monthly income is adequate before assuming any new debt.

There is no reason why you should not apply for a home equity loan after a bankruptcy if you have the ability to show the underwriter that you reestablished credit and made your monthly payments on time since the bankruptcy was discharged. Take a few minutes and complete the short form above to find lenders offering equity loans for poor credit or a bad credit HELOC after a bankruptcy.

How Long Do I Have to Wait to Qualify for a Home Loan After a Bankruptcy

The timeline for becoming eligible for a mortgage post-bankruptcy varies among financial institutions, ranging from one to four years after your bankruptcy discharge. Moreover, rebuilding your credit to meet the qualification requirements for your desired mortgage often necessitates additional time and effort.

Take a brief look at the usual waiting periods based on loan type:

  • Conventional Mortgage: 2–4 years
  • FHA Mortgage: 2 years
  • Home Equity Loan: 2-4 years
  • USDA Loan: 3 years
  • VA Home Loan: 2 years
  • Hard Money: 1–2 years

Looking for a Home Equity Loan After a Chapter 7 BK?

If your bankruptcy has been discharged, then BD Nationwide can help you locate second chance loan opportunities. Regardless of your credit history, we can assist you determine what it takes to qualify for a mortgage after your bankruptcy was discharged. Take a second and convert your adjustable rate debt into a fixed simple interest loan for lower monthly payments. Consider the possibility of a home equity loan after a chapter 7 bankruptcy.

Top 3 Reasons a Home Equity Loan Can Help Prevent a Bankruptcy

1. Pay off Credit Card Debt and Past Due Loans – Using your equity is usually a wise way to reduce monthly obligations because in most cases the interest rates are lower. The fixed, simple interest saves you money over the variable interest that revolving debt attaches itself to.

2. Installment Loans Help Consumers Raise Their Credit Scores –Yes equity loans are installment loans with fixed rates, terms and set monthly payments. When you make your payment on time each month it helps lift your fico scores and rebuilds your credit profile, so you can qualify for the lowest rates in the marketplace.

3. Access to Money Protected by Tax Deductions – Homeowners are blessed with quicker access at more affordable rates with home equity loans. In most cases, the IRS allows people to deduct the interest they pay on their equity loan if they are using the funds for home improvements to increase the property value.

Private Money, Non QM and Hard Money Loan Options

An alternative is a non-qualified mortgage, or hard money loan which operates outside federal guidelines and consequently involves higher risks. Typically the interest rates are quite a bit higher and the lending fees are significantly higher as well.

Private Money Loan Highlights:

  • Interest-only payments, implying no equity accumulation in the home.
  • A balloon payment, a substantial payment due after a specified period, necessitating significant financial preparation.
  • A term exceeding 30 years. (40-year mortgages are popular)
  • Non-qualifying mortgages lack a waiting period but come with substantial risks.

These private home loans are generally considered a last-resort option for individuals seeking to purchase a house with poor credit.

Do I have to wait 2 years to buy a home after bankruptcy?

Having a bankruptcy reflected on your credit report can diminish your credit score. In most cases, to meet the minimum credit score requirements set by your mortgage lender, you’ll need to dedicate time to repairing your credit if your score falls below 580 points.

Lenders usually postpone reviewing your mortgage application until your bankruptcy has been discharged, indicating the elimination of your eligible debts. Following the discharge, there’s often a waiting period before you can apply for a home loan, HELOC or 2nd mortgage. While certain government-backed loans don’t impose waiting periods, most conventional loans necessitate a waiting period of one to four years, contingent on the loan type and bankruptcy category.

Home Loans after a Bankruptcy

• FHA Loans after a BK or Foreclosure

• Bad Credit Loans after a BK or Short-Sale

• Roll Home Loans into a Bankruptcy chapter 7, 13.

• Cash Refinance with a Home Loan Bankruptcy

• Get Solid Equity Loan Bankruptcy Advice

• Low Payments with Interest Only Loan Options for 1st and 2nd mortgages

• No Mortgage Insurance Required with 2nd loans

• Sub-Prime Home Equity Loans

• Limited Credit on Home Equity Loan Bankruptcy

Finding Lenders that Approve Home Equity Loans after Bankruptcy

Mortgage Tips: Bankruptcy Versus Debt Consolidation Loans
In the past, struggling debtors behind in payments with no solution in sight could file a Chapter 7 bankruptcy and eliminate any unsecured loan. With the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 now in effect, filing a bankruptcy is not the easy answer it used to be.

There are many new laws regarding writing off 2nd mortgage liens and debt forgiveness for HELOCS and home equity loans in a bankruptcy. It is imperative that you speak with several financial advisors that have experience with bankruptcy and debt consolidation before you make any commitments.