When will I be able to buy a house after bankruptcy?

Many people wonder if they will be able to buy a house after filing bankruptcy.  The answer is to that question is yes, if you have sufficient income, you will be able to buy a house.  The second question people ask is how long after bankruptcy can they buy a house.  The answer to that question depends on if you completed a Chapter 13 or a Chapter 7 case.

Chapter 13

In many cases, lenders are willing to allow a borrower to obtain a mortgage as soon as 1 day after a Chapter 13 discharge.  Loan programs such as FHA, USDA and VA loans tend to be the most lenient for the borrower.  Some banks even have their own departments dedicated to helping customers obtain mortgages after bankruptcy.  One such bank can be found by clicking this link.  Here is a good overview of the VA loan process VA loan approval after bankruptcy or foreclosure

You may even be able to qualify for a FHA mortgage while you are still paying on a Chapter 13 plan.  If you have made your Chapter 13 payments on time for a year, you can qualify for an FHA loan.  You can learn more about the FHA process at FHA loan rules for borrowers after filing bankruptcy.  Keep in mind that even if you are approved by your bank and by the FHA, the bankruptcy court and the Chapter 13 trustee still have to approve you request to obtain a mortgage.

Chapter 7

If you want to purchase a house following a Chapter 7 case, you may have to wait two to four years.  During that period, you need to focus on improving your overall financial status by increasing savings and making sure that you do not accumulate excessive debts.  Be sure that you keep your new developing credit report clean.  Again, the guidelines for mortgage approval will vary depending on the individual financial institution and the type of loan you are applying for.

Regardless which bankruptcy you file, so long as you continue to follow good credit practices after your discharge, your future prospects for home ownership will be bright.

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