Buying a Home After Bankruptcy

Buying a home after bankruptcy doesn't have to be all that different from doing it without that on your record. If you really want a home, don't let your past stop you, but do be aware that you'll need to be more persistent and patient.

Almost every lender will want you to wait two years after you've completed bankruptcy to apply for a mortgage, but it will probably take at least that long to get your other things in order anyhow. There are four things you need to do to prepare yourself- take care of your past problems, save a down payment, build new credit, and secure steady, well paying employment. Taking care of your past problems should be something you do whatever your financial goals. You should obtain a credit report and make sure that all appropriate accounts are marked “included in bankruptcy” and not open or overdue. This is a common problem and a very important one to take care of as soon as you can. To show that you are serious about buying a home after bankruptcy you should have a large down payment, which you should have anyway. To avoid private mortgage insurance you need to have a twenty percent down payment. I know this is a lot of money, but so is a house.

The most important thing to do to build new credit is to make timely payments. Build a budget, stick to it, and stay on time. On that note, getting a credit card and using it lightly is a great way to build credit. Right after bankruptcy I would suggest looking at secured credit cards. As with anything, look at several deals to find the best rate. It's also a good idea to secure a small loan to show you can be responsible with one, but be aware that your interest rates will be very high. The other thing that you need to do, which will be really needed for all other things is a well paying, steady job. The longer you've been with your job, the better for your application.

It may seem frightening and impossible after your past problems, but buying a home after bankruptcy is possible.