Buying A Home After Bankruptcy

by Andrea
(Long Island, New York USA)

Ask Kate about buying a home after bankruptcy: Hi Kate, How long does it take to qualify for a mortgage after bankruptcy? I am filing for bankruptcy because I am unemployed and unable to keep up with my bills.

Andrea continues... I have finally stopped ignoring the monkey in the room, and the hundreds of creditor phone calls each week, and I am ready to start with a clean slate.

As you probably already know, my credit score is in the toilet, beyond bad. Right now I can't even get a bank account! I am working with prepaid debit cards and money order to conduct all financial matters.

So I am just looking to get a range of how long it will take for me to qualify for a mortgage after bankruptcy, in your expert opinion?

I plan on working on rebuilding my credit as soon as my case is settled. The house that will be a part of my filing was bought for $320,000 in 2006 and right now the houses on the same block are going for under $200,000.

Do you think it will be 6 months, 12 months, 2 years or more? Will I need to have a 20 percent down payment or more in order for a bank to lend me any money in the next few years?

I am really interested in knowing how long it will be before I can call myself a homeowner again. Thanks for your help.

Kate Answers: Buying A Home After Bankruptcy

Dear Andrea, Your determination is inspiring!

Facing the reality of bankruptcy is painful. But coupling it with preparation to buy a house and once again become a homeowner is admirable.

The residential mortgage loan application asks these two questions about bankruptcy and foreclosure.

Have you been declared bankrupt within the past 7 years?

Have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years?

Some loan programs adhere strictly to the 7 year waiting period while others like FHA are more forgiving.

Depending on the current trend of approval decisions, buying a home after bankruptcy has taken as little as a year. However, this was unusual and in the current environment, I'd plan on two to three years at a minimum.

Bankruptcy coupled with foreclosure will generally extend the period. So be wise and use this time to educate yourself.

FHA And Buying A Home After Bankruptcy

FHA loan guidelines have rescued America's home buyers time and again since the Great Depression. I don't know where we'd be today without FHA home loans!

FHA mortgage loans also require less down payment than conventional loans, many times as little as 3 percent.

So prepare now for buying a house. Then when the time comes, qualifying for an FHA mortgage will go more smoothly.

Credit And Buying A Home After Bankruptcy

The best place to begin your preparation is with credit. Here's how! Read my Lexington Law Review. Lexington Law started off as a law firm in the 1990's and evolved into one of the largest credit repair firms in America.

I like Lexington Law because they are an actual consumer advocacy law firm.

How To Buy A Home

Last but not least, go to How To Buy A House - Articles By Kate Ford where you will see a list of my home buying articles.

My articles cover a wide range of topics on home buying, from choosing a Realtor and mortgage lender to the type of house that fits your lifestyle, all with a fresh twist!

Best Wishes,



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