mortgage after bk 1For most people, the idea of filing for bankruptcy can be scary. The term “going bankrupt” just sounds frightening.

For those considering bankruptcy, many questions are likely to come to mind. For example:

  • How will bankruptcy affect my credit scores?
  • How long will it take for me to rebuild my credit?
  • How long before I can get approved for a mortgage?

Fortunately, in addition to providing relief from debt and getting a fresh start, filing for bankruptcy doesn’t mean the end of the road for getting a mortgage.

In fact, homeowners may be pleasantly surprised to know that it’s possible to buy a home just two years after bankruptcy.


There’s no way to sugarcoat the negative effect a bankruptcy will have on your credit scores.

Regardless of the type of bankruptcy filed, a bankruptcy will hit your credit report hard, and cause your scores to drop significantly.

Chapter 7 bankruptcies, the one designed to wipe out all your debt, will remain on your credit report for a period of ten years.

Chapter 13 bankruptcies, the one designed for debtors with regular income who can pay back at least a portion of their debts over a specified repayment period, will stay on your credit for seven years.

Fortunately, the impact on your credit scores will lessen over time.

It’s a good idea to monitor the progress of rebuilding your credit after bankruptcy. This can be done easily through a number of free online credit reporting services.


The waiting periods required after bankruptcy will vary according to the type of bankruptcy and the type of mortgage loan for which you’re applying.

Most lenders will require paperwork from the bankruptcy court documenting your bankruptcy filing, as well as documentation to show it has been discharged.

FHA and VA Mortgage Loan Requirements

Both the FHA and the VA have similar requirements with regard to waiting periods after a bankruptcy.

You can apply for an FHA or a VA mortgage loan after your chapter 7 bankruptcy has been discharged for two years.

Chapter 13 bankruptcies are viewed a bit differently. The FHA and the VA allow homeowners to apply for a mortgage as long as they’ve made 12 on-time bankruptcy payments, and they receive bankruptcy court approval.

USDA Mortgage Loan Requirements

In most cases, you can apply for a USDA rural loan after your chapter 7 bankruptcy has been discharged for three years.

Much like its sibling government entities, FHA & VA, it’s possible to qualify for a USDA loan while still in chapter 13 bankruptcy.

As with the FHA and VA, you can apply for a USDA mortgage as long as a minimum of 12 timely payments have been made, and the borrower receives written permission from the bankruptcy court.

Conventional Mortgage Loan Requirements

Fannie Mae and Freddie Mac require longer waiting periods than government loans.

Homeowners may apply for a conventional loan after their chapter 7 bankruptcy has been discharged for four years.

As is the case when qualifying for other mortgage loans, conventional loan waiting periods for chapter 13 bankruptcies are less stringent. However, unlike their government counterparts, conventional loans will require the chapter 13 bankruptcy to be discharged.

You can apply for a conventional loan after your chapter 13 bankruptcy has been discharged for two years.


Regardless of the type of mortgage for which you’re applying post-bankruptcy, there are a number of steps you can take to begin repairing your credit right away.

After a bankruptcy, you can rehabilitate your credit by establishing new credit via secured credit cards and installment loans, and making on-time payments on all credit accounts.

A common mistake that people make after going through a bankruptcy is to shy away from new credit. New credit is imperative, however, as it begins to rebuild your bankruptcy-damaged credit scores.

New credit also is important because it shows the lender your ability to make on-time payments. The idea is to prove to the lender that the bankruptcy was an isolated event.

A quick and easy way to help reestablish your credit is through a secured credit card.

A secured credit card is usually granted by your bank and is backed by the money you have in your savings account as collateral.

Secured credit cards are not to be confused with debit cards. Unlike debit cards, most secured credit cards report to the credit bureaus, allowing you to restore your credit scores.

Installment loans have an even greater impact on your credit scores. Personal loans and auto loans are examples of installment loans.

Although you may not qualify for the lowest interest rate on an installment loan due to your recent bankruptcy, the positive effect on your credit scores can conceivably offset the higher rate.

Here’s another very important detail not to be overlooked – underwriters will look very closely at how you’ve paid your bills since your bankruptcy.

It’s imperative to make all of your payments, on everything, in a timely manner; especially housing-related payments such as your rent or mortgage.


Even if you’ve filed bankruptcy, with a little patience and planning, you can soon qualify for a low interest rate.

How low of a rate will you qualify for? Find out now. There’s no obligation and no social security number is required to get started.


Leave a Reply

Your email address will not be published. Required fields are marked *