One of the most common questions we get from our clients is whether they can buy a home after filing for bankruptcy, and if so, how long they must wait to be eligible to do so.
The short answer to the first question is “yes,” you will be able to buy a new home after-bankruptcy. The more difficult question is how long it will take for you to build up enough credit to qualify for a mortgage loan. The answer is different for everyone, but with patience and hard work, you will likely be able to buy a home quicker than you might think.
Mortgage lenders look at a variety of factors in deciding whether you qualify for a mortgage, including:
- Credit score. It is true that a Chapter 7 or Chapter 13 filing will negatively impact your credit score. It is therefore important to start working to rebuild your credit as soon as possible. You want to show your creditors that you are taking your fresh start seriously. One of the easiest ways to do this is to get a secured credit card and make your payments on time.
- Income. Your income is important, but so is the amount of time you have been at your job. Lenders want to see stability in your employment record.
- Down payment. The larger your down payment amount, the more likely a lender is to give you a mortgage loan. Start saving for your down payment as soon as possible.
Many lenders require you to wait at least two years after you obtain your bankruptcy discharge to qualify for a mortgage loan. Use this time to get your finances back on track and to save money for your down payment.
If you are interested in learning how filing a bankruptcy case can benefit you, contact Levitt & Slafkes, P.C., at 973-323-2953. You can also reach us by filling out our online form. We represent debtors in Chapter 7, Chapter 13 and Chapter 11 filings. Let us help you get the fresh financial start you need today.