Buying a home after bankruptcy

Work on your credit scoreFiling for bankruptcy will significantly lower your credit score and make it more challenging to get approved for a mortgage at a reasonable interest rate. It takes time to rebuild your score, but there are things you can do to start improving it over the next few months. For example, make sure you pay your bills on time every month. Open a secured credit card and pay it off each month.

Seek out the right mortgage Affordable mortgages for people with less-than-perfect credit are out there, especially if you have saved up for a sizeable down payment. An FHA loan backed by the Federal Housing Administration is a popular option and is available to anyone with a credit score of at least 500. If you are an active-duty servicemember or veteran, or you are married to one, you could qualify for a VA loan. And if you are buying a home in a rural area, a loan from the USDA could help you. Neither of these programs has a minimum credit score requirement.

Be patient While you may be able to buy a house now, waiting a few years could help you qualify for a nicer place at a better interest rate. Depending on which type of bankruptcy you used, a filing can stay on your credit history for as long as ten years. The longer you can wait, the better the deal you will likely get. Overall, bankruptcy usually has a positive outcome on people's lives. Instead of living with the burden of uncontrollable debt limiting your life, you can break free and move on to greater possibilities.