Denied FHA Mortgage Based on Bankruptcy Explanation

[BabyCats]

I am 4+ years post chapter 7 discharge and applying for very first mortgage (no mortgage in bankruptcy). Is it possible to be denied an FHA loan based on your bankruptcy explanation?

Thanks.

[LadyInTheRed]

Sure. Each bank has it's own criteria for loan approval. Many have stricter requirements than the FHA standards. There are some banks who won't lend to anybody who has filed BK. But, assuming you qualify in other respects, you should be able to find an FHA mortgage 4 years after BK with little if any trouble. If you don't want to risk being turned down, check ahead of time regarding the lender's standards regarding bankruptcy. Or, work with an experienced mortgage broker who can find the best loan for which you qualify.

I highly recommend getting counseling from a non-profit, first homebuyers program. It's a great way to learn about the purchasing process and how much you can really afford to pay.