For a home buyer, bankruptcy can be devastating as it shuts the ability of the affected person to borrow any money or even use credit card. Your credit is in its lowest ever and it can take years to get it back. However, with proper preparation and good financial planning, it is possible to get a mortgage within two years. After the discharge of a bankruptcy, most real estate agents recommend awaiting period of 24 months before applying for a loan to buy a home. At times it may be possible to get a mortgage sooner but the interest rates would be detrimental.
There are various things that you can do to qualify for a loan. First you must remember that the bankruptcy must be discharged. If not yet, no lender will speak to you. You should then get your credit in order. Since you know your obligations after a bankruptcy, you should report to the lender any debts that still appear in your report after it has been paid.
The easiest way to rebuild your credit score is to prove to creditors that you can be trusted to pay money that you owe them. Before you can think of buying a home, you can prove this by securing installment loans and credit cards. Avoid using the whole portion of your credit or even applying for too much credit. If possible pay back more than the monthly minimum. Pay your bills and have some money for savings. Try to keep the same job for a long period of time.
After a period of two years, you can now apply for the mortgage. The lender will require you to meet several criteria before lending you money for the mortgage. These include a good debt/income ratio and stability on the job. Having money in your bank account and not having a history in bounced checks can help a lot. A 401(k) assets or a retirement plan can help make your credit look good. A good down payment can also carry a lot of weight.