The general answer we tell clients is two years. However, there are many factors that come into play. For most FHA loans you will need to wait 2 years for the discharge date of your chapter 7 to apply for a mortgage. The waiting period is less if you can show extenuating circumstances led to the bankruptcy and you are not likely to need to file again.
Generally the waiting period for an FHA loan after a chapter 13 is 1 year. This is another good option if you are a veteran or if you qualify for a VA loan. Again the waiting period for chapter 7 is 2 years but there is no waiting period if you filed chapter 13.
It is important after the bankruptcy that you immediately begin to rebuild your credit. Increasing your credit and credit score will help when you apply for an FHA, VA or conventional mortgage. You can rebuild your credit with secured credit cards or other available lines of credit. You will want to make sure when rebuilding your credit you are also utilizing different types of debt such as a new car loan, utility bills, or a secured credit card.
A secured credit card lets you treat your credit account like a debit card and helps you keep a handle on your finances. Make sure you pay all of your accounts on time and keep your credit balances low. Make sure not to utilize more than 20% of your available credit line. Using too much of your credit line can hurt your overall credit score, even if you are paying on time. Taking these steps will allow you to purchase a home after bankruptcy.
If you have any questions about the topic discussed in this article, or any bankruptcy law matter, please give us a call at Bononi & Company 724-832-2499.