How Quickly Can We Get a Mortgage After Bankruptcy?
We get this question a lot in the real estate industry: “When can I get a mortgage if I’ve declared bankruptcy?”
You might be surprised to know that it’s quicker and easier than it once was
If you’ve gone through a bankruptcy, you may be able to finance a new home two years after receiving bankruptcy discharge and as early as one year after filing Chapter 13 or Chapter 7. Since a large portion of home loans depend on FHA or VA loan guarantees, your ability to qualify for those guarantees may determine when you are able to obtain a home loan.
However, there are some stipulations: borrowers must reestablish good credit practices and habits. They must not be incurring any new credit applications and they must demonstrate the ability to manage their financial affairs.
You can do that by paying your rent, utilities and any loans or credit card payments on time every month. This will substantially increase your credit score, especially if you don’t take out any new loans or max out any credit cards in the process.
The FHA has their own guidelines for borrowers. FHA loans will only be approved with credit scores of 640 and above; however, with a 20% down payment, scores as low as 540 could get accepted. For conventional loans, most lenders require a minimum credit score of 660 or better to qualify and to get the best deal a credit score of 720 is ideal.
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