Many people who file for bankruptcy are concerned about never being able to buy a home. It is a myth that you will never be able to buy a home if you file for bankruptcy. Once your bankruptcy has been discharged, you can usually qualify for financing on a home as early as 18-24 months after the discharge. In addition to your credit score, lenders will look at income verification and your down payment. Assuming you’ve re-established credit, you may be able to qualify for 100% financing after the discharge. You can usually qualify as long as most of your payments (since the discharge) have been reported to the credit bureaus as having been paid on time.

If you want to buy a home after bankruptcy sooner than 2 years after the discharge, then you will usually need to have a flawless payment history since the discharge. You will probably also need money for a down payment. FHA and VA home loans can be obtained as soon as one year after filing for either Chapter 7 or Chapter 13 bankruptcy. If you are concerned about buying a home after your bankruptcy discharge, make sure you begin to re-establish credit as soon as possible. Make on-time payments, keep outstanding debts less than 50% of your total credit lines, and try to pay off balances as soon as possible.

When you go to buy a home after bankruptcy, lenders will closely look at your debt to income ratio. Make sure you do not end up in financial trouble again by keeping a close eye on your total liabilities. You will need documentation supporting your total monthly income, and if you are self-employed you will need the past two years’ worth of tax returns (assuming a full documentation loan). Your lender will determine how much home you can afford to buy. Make sure you can easily afford the monthly mortgage payment, however, because you do not want to end up in bankruptcy again.