If the American dream is to own a home, conventional wisdom says about 800,000 dreams were shattered in 2016.
That’s how many bankruptcies were filed and a lot of people think that filing bankruptcy ruins any chance they’ll ever have to qualify a mortgage.
Think again. You could qualify for a mortgage as quickly as one year after your bankruptcy is discharged.
It depends on what type of bankruptcy you filed, what kind of loan you are pursuing, and how long a “waiting period” is involved, but if you get your financial house in order – specifically repair the damage to your credit score – you could walk into a new home not long after you walk out of bankruptcy court.
Why Is There a Waiting Period for Mortgages after Bankruptcy?
The first obstacle to owning a home after bankruptcy is dealing with the “waiting period” (also known as a “seasoning period”) required by lenders after bankruptcy.
Lenders want you to have time to restructure your finances and rebuild your credit score so they instituted waiting periods to allow you to demonstrate that you can handle mortgage payments.