Can You Qualify for a Mortgage If You Filed for Bankruptcy?

​After declaring bankruptcy, many people simply want to move on with their life. Sometimes the moving-on process involves making big changes like buying a house. For someone who has declared bankruptcy, buying a house can be a little more complicated than someone without a bankruptcy in their credit history.

Fortunately, a bankruptcy does not automatically disqualify someone from ever borrowing a mortgage. Knowing the circumstances under which you can qualify for a mortgage can help you decide whether or not now is the right time to start shopping for a home. 
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​Will Bankruptcy Prevent You From Qualifying for a Mortgage?

Yes, even if you have a bankruptcy in your credit history, you can still qualify for a mortgage after passing the mandatory waiting period. 

Different types of loans have different waiting periods. 

• Conventional loans: 4 years after discharging from a Chapter 7 bankruptcy, 2–4 years after discharging from a Chapter 13 bankruptcy.
• FHA loans: 2 years after discharging from a Chapter 7 bankruptcy, 1 year if you filed for Chapter 13 bankruptcy.
• VA loans: 2 years after the discharge date.
• USDA home loans: 3 years after filing for Chapter 7 bankruptcy, 1 year after filing for Chapter 13 bankruptcy.


Every home loan has its own specific approval qualifications in addition to this seasoning period, so you can talk to your lender to find out which type of loan is right for you.

If You Want to Buy a Home, What Should You Do?

If you've declared bankruptcy sometime in your past and now want to buy a home, talk to a mortgage lender. Your mortgage lender will need to determine which home loan is best for you and will then need to find out whether or not you've completed the waiting period. 

If you haven't completed the seasoning period yet, you'll have a bit of a wait ahead of you. During that time, do what you can to rebuild your credit. A bankruptcy can have a negative impact on your credit, so going through the rebuilding process is important.

What Can You Do to Improve Your Credit Score?

You can do many things to improve your credit score after a bankruptcy. You can start by getting a secured credit card. A secured credit card is a credit card that you secure through a deposit that is equal to, or nearly equal to, the credit limit on the card. The credit card company can seize the deposit in the event that you fail to make the payments due on the card.

Your activity on the card is reported to credit agencies, so using the card on a monthly basis and paying your card on time will help boost your credit score. Just do what you can to avoid incurring debt on your card. 

It's also important to pay any monthly payments for debts that survived your bankruptcy. When you stay on top of payments due to creditors, you help yourself look like a better candidate to mortgage lenders.

Once you have gotten through the waiting period, if you've been rebuilding your credit, you may be able to start loan shopping. With a troubled credit history, you may need to contact a variety of lenders before you find the right lender for you. Be patient and don’t give up!

Where Can You Find Out More Information About Declaring Bankruptcy?

If you have more questions about declaring bankruptcy and need more information about life after bankruptcy, contact The Michelson Law Office. We're happy to answer any questions you might have about bankruptcy and how your life will be impacted by filing for bankruptcy.