If you’re filing for bankruptcy, you may be concerned about never being able to buy a home.  Unfortunately, many people believe that if they’ve filed for bankruptcy, they’ll never be able to buy a home.  This is one of the biggest bankruptcy myths.  Once your bankruptcy has been discharged, you can qualify for financing on a home as soon as 18-24 months after the discharge.

Lenders will look for income verification and your down payment, in addition to your credit.  You may be able to qualify for 100% financing if you’ve re-established good credit.  After your bankruptcy has been discharged you can usually qualify as long as most of your payments have been reported to the credit bureaus as having been paid on time.

Do you want to buy a home sooner than two years after your bankruptcy has been discharged?  In this case, 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 are another option to consider.  VA and FHA loans can be obtained as soon as one year after filing for either Chapter 7 or Chapter 13 bankruptcy.  In order to qualify to buy a home after bankruptcy, you need to begin rebuilding your credit as soon as possible.  Make consistent on-time payments, and keep your total debt balances less than 50% of your total credit lines.  Focus on paying-off all balances as soon as possible.

Given your history of bankruptcy, lenders will closely look at your debt to income ratios.  Keep a close eye on your total liabilities so that you don’t find yourself with too much debt.  You will need documentation supporting your total monthly income (i.e. paystubs) and bank account balances.  If you are self-employed (and pursuing a full documentation loan), you will need the past two years’ worth of tax returns.  Your lender will calculate how much home you can afford to buy.  Be cautious when buying your home – don’t buy something you can’t easily afford.  You don’t want to end up in bankruptcy again, so make sure you can easily afford the monthly mortgage payment.