Credit Issues

If you have had a credit Issue in the past, you may wonder how long you need to wait to buy another home. These are the basic wait times, but there may be other factors.


Mello Funding

12/9/20231 min read


The decision to buy a new home can be challenging, especially if you have had credit issues in the past.
Knowing how long to wait before applying for a mortgage can save you time and money in the long run.
Download the document below to get general guidelines for the wait times for different credit issues, although there may be other factors involved.

For instance, for a charge off mortgage, you need to wait for four years for conventional loans, but only two years with extenuating circumstances. The wait time for FHA and VA loans is nil. A deed-in-lieu requires 4 years of waiting for a conventional loan, whereas for FHA and VA, it's only two years, and USDA does not have a waiting period.

If your house was included in bankruptcy, you need to follow the bankruptcy waiting time, which is 3 years with extenuating circumstances or 7 years with no bankruptcy, for foreclosure. The wait time for both FHA and VA loans is two years, and USDA is one year with extenuating circumstances.

Short sales require four years waiting time for conventional loans and three years for FHA. No waiting period is needed for VA, and you are likely to require 12 months of satisfactory credit after the event with USDA. The wait time for federal tax liens depends on the payment agreement with 1 to 3 payments.

In conclusion, these are general guidelines. If you have any issues, it's best to contact us before applying.

Your derogatory credit cheat sheet

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