Waiting Periods Before Applying for Your FHA Loan
February 21, 2024
If you want to buy a home but have had major changes in your income, employment, or credit, there may be a lender-required need to wait a certain amount before applying for an FHA home loan.
Borrowers who have missed mortgage payments or rent payments went from salary to contractor status, and those who have filed for bankruptcy may all have to build in some extra time before applying for a mortgage. We examine some common scenarios below.
After Taking a New Job
If you have recently entered the job market with no full-time experience, it may be wise to wait 12 months before considering approaching a lender.
Some may require 24 months in the job, depending on the nature of your employment. Others may view your profession as a highly skilled industry and adjust those waiting times accordingly.
If you apply for an FHA loan and you recently changed careers or switched from salary to commission, or started your own business, you will quickly learn that your lender wants a minimum amount of time spent earning that money to show that the income is likely to continue.
Some must delay a loan application for up to 24 months. It all depends on the specifics of your situation.
Some may not need to wait 24 months in cases where there’s been an “upwardly mobile job change” instead of a lateral move or a step downward. Lender standards will be crucial in this area.
After Bankruptcy
Your required “seasoning period” or waiting time before you apply for a new line of credit may depend on the type of bankruptcy you filed.
Typically, borrowers must wait between 12 and 24 months after the bankruptcy is discharged to apply. You cannot start that clock on the filing day, only after discharge.
After Missing Mortgage or Rent Payments
The best advice in this area? Wait at least 12 months from the missed payment date before applying for a home loan.
What’s Next?
If you are ready to start looking for a lender, compare five or six of them with the same questions, including how long you must wait if your circumstances include any of the abovementioned scenarios. Remember, every lender’s standards have their own nuances. Your experience will vary depending on the lender and other factors.
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Borrowers who have missed mortgage payments or rent payments went from salary to contractor status, and those who have filed for bankruptcy may all have to build in some extra time before applying for a mortgage. We examine some common scenarios below.
After Taking a New Job
If you have recently entered the job market with no full-time experience, it may be wise to wait 12 months before considering approaching a lender.
Some may require 24 months in the job, depending on the nature of your employment. Others may view your profession as a highly skilled industry and adjust those waiting times accordingly.
If you apply for an FHA loan and you recently changed careers or switched from salary to commission, or started your own business, you will quickly learn that your lender wants a minimum amount of time spent earning that money to show that the income is likely to continue.
Some must delay a loan application for up to 24 months. It all depends on the specifics of your situation.
Some may not need to wait 24 months in cases where there’s been an “upwardly mobile job change” instead of a lateral move or a step downward. Lender standards will be crucial in this area.
After Bankruptcy
Your required “seasoning period” or waiting time before you apply for a new line of credit may depend on the type of bankruptcy you filed.
Typically, borrowers must wait between 12 and 24 months after the bankruptcy is discharged to apply. You cannot start that clock on the filing day, only after discharge.
After Missing Mortgage or Rent Payments
The best advice in this area? Wait at least 12 months from the missed payment date before applying for a home loan.
What’s Next?
If you are ready to start looking for a lender, compare five or six of them with the same questions, including how long you must wait if your circumstances include any of the abovementioned scenarios. Remember, every lender’s standards have their own nuances. Your experience will vary depending on the lender and other factors.
------------------------------
RELATED VIDEOS:
The ARM is an FHA Adjustable Rate Mortgage
A Few Tips About Your Fixed Rate Mortgage
Monthly Payments Establish Good Credit
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