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Can I Get a Mortgage After a Bankruptcy?

March 4, 2022

The decision to file for bankruptcy can be a difficult one. You might wonder how it will impact your financial future in the near and distant future. Many potential bankruptcy filers wonder if they can obtain a mortgage after filing for bankruptcy, a legitimate concern as many will like to own a home again or for the first when they are more financially stable. The good news is that people who file for bankruptcy can get a mortgage. A history of bankruptcy doesn’t preclude someone from getting a mortgage. However, other things can be common among some bankruptcy filers, especially ones that haven’t filed very long ago. So it’s best to discuss your specific situation as well as questions or concerns with a seasoned St. Louis bankruptcy attorney.

New Mortgage Waiting Periods

Mortgage creditors are still willing to offer home loans to bankruptcy filers. However, they require some assurance that you’ll keep up with the mortgage payments going forward. A new mortgage waiting period gives you the opportunity to rebuild your credit and prove you are capable of taking on and maintaining mortgage payments.

Waiting periods can be anywhere from two to four years after your Chapter 7 bankruptcy discharge. Be aware that the waiting period will begin on the discharge date, not the original bankruptcy filing date. You should also know that the waiting period can increase if you have filed more than one bankruptcy or if you have a foreclosure in your past.

Even still, most mortgage loan companies will decrease the waiting period if you can establish that you filed bankruptcy due to extenuating circumstances beyond your control instead of financial mishandling. Examples of situations that might apply include:

  • The death of a spouse

  • A natural catastrophe

  • A severe medical illness

The waiting period can depend on the type of home loan you apply for (FHA, conventional, etc.). There will also be other requirements, such as a minimum credit score, minimum income, and a down payment.

While You Wait

You can take advantage of this waiting period to help you be in a better financial position when the time comes to apply and maintain your mortgage. Consider these steps:

  • Rebuild your credit by monitoring your credit closely and using any lines of credit responsibility.

  • Stick to a budget so that you don’t run into trouble with your credit.

  • Save money for a down payment and an emergency fund.

  • Pre-qualify for a mortgage once you are almost ready to start looking for a home.

Questions About Bankruptcy and Mortgages? Call a Knowledgeable St. Louis Bankruptcy Attorney Today

At AKS Law, we know what it’s like to struggle with debt and want to take the next best step to deal with your financial problems. We also know that you may have a dream of future homeownership. We can answer your questions and address your concerns so that you have a plan to move forward.

Why you should choose AKS Law:

  • We have more than a decade of experience.

  • Our attorney personally handles every case.

  • We have proven case results.

  • We provide clients with their lawyer’s cell phone number.

Please reach out to us at (314) 314-740-2989 or contact us online to receive a free bankruptcy case review. You can call us anytime as our phones are answered 24/7.