How to Buy a Home After Chapter 7 Bankruptcy

The damages from a bankruptcy, such as a low credit score and the inability to qualify for low rate financing, can last for seven years. However, a bankruptcy also gives you the opportunity to fix your past mistakes and start fresh. It does take time to improve a low credit score following a bankruptcy, so the sooner you begin to repair your score, the sooner you can acquire a home loan and obtain a good interest rate.

Instructions

1

Apply for a store credit card or gas card, or visit your bank and inquire about secured credit cards, which are easier to get after a bankruptcy because they require a security deposit. Companies such as Creditcards.com offer information on different types of credit cards (see Resources).

2

Pay all your bills on time, which slowly improves your credit rating. In turn, lenders are more apt to approve you for a mortgage after a bankruptcy discharge (when you're no longer liable for pre-bankruptcy debts).

3

Save your disposable income (money left over after you've paid your living expenses) and use this for a down payment. Traditional mortgage loans ask for a 20 percent down payment, however, some loans require less. Mortgage brokers can provide specific information on down payment requirements and loans available to people with a bankruptcy on their record.

4

Shop around. Getting a mortgage with a bankruptcy on your record may require speaking with various lenders in order to get the best finance package. Speed the process and use a mortgage broker who'll obtain multiple loan quotes from different lenders. You can make a side-by-side comparison and select the lender that offers the lowest rate and the best terms.