How Soon After Chapter 7 Bankruptcy Can I Get a Mortgage?

A Chapter 7 bankruptcy on your credit file will scare off some lenders until you've rebuilt your credit score. If you are planning on buying a house after a Chapter 7, choosing the right home loan and waiting for a certain period of time to pass can help you qualify for the best rate on a new mortgage.

Six Months after a Bankruptcy

Lending options are limited with a fresh bankruptcy on your credit file. But according to MSN Money, some lenders will approve you for a mortgage loan six months after a bankruptcy. While these lenders may take a chance and approve your loan request, there are consequences to acquiring a loan this soon after the discharge. Because you have not had time to rebuild your credit and increase your score, lenders will charge a higher rate on the mortgage loan.

24-Month Waiting Period

On average, mortgage lenders prefer at least 24 months to pass before they approve a mortgage loan. This time frame provides sufficient time for you to acquire new credit accounts, and make timely payments on these accounts in order to build your credit score. Plus, if you're accustomed to other bad credit habits such as late payments or carrying high debts, you could use this time to learn good credit management skills.

FHA Mortgage Loans

Consider a mortgage loan insured by the Federal Housing Administration when the time comes to get a mortgage after a Chapter 7 bankruptcy. There are several good reasons to choose FHA mortgage loans. These loans have lower credit score minimums in comparison to other types of mortgages. After a bankruptcy, you can acquire an FHA mortgage with a 620 score. The only stipulations are that you have no more than two 30-day late payments on your credit report and excellent credit since the discharge.

How to Rebuild Credit Score

New credit after a Chapter 7 bankruptcy puts you on the path to ownership. This is key to re-establishing your credit score and reversing the damage of a Chapter 7. There are several ways for you to improve credit after a bankruptcy and qualify for a mortgage after 24 months. One option involves opening a secured credit card with your bank and supplying collateral in the form of a $200 to $500 security deposit. Another option involves reaffirming an auto loan after a bankruptcy, where you agree to continue paying the debt as agreed. Pay these accounts each month on time to slowly begin fixing your credit score.

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About the Author

Valencia Higuera is a freelance writer from Chesapeake, Virginia. She has contributed content to print publications and online publications such as Sidestep.com, AOL Travel, Work.com and ABC Loan Guide. Higuera primarily works as a personal finance, travel and medical writer. She holds a Bachelor of Arts degree in English/journalism from Old Dominion University.