How to Get a Mortgage After Chapter 13 Bankruptcy

Getting a Mortgage After Chapter 13 Bankruptcy

If you’ve recently completed Chapter 13 bankruptcy, you might be wondering whether you’ll ever be able to buy a home again. Fortunately, it’s absolutely possible to get a mortgage after Chapter 13 bankruptcy.

With the right planning and preparation, bankruptcy can leave you better off than you were before, and with more options. Here’s what you need to know to make it happen.

How Soon Can You Get a Mortgage After Chapter 13?

Most people assume bankruptcy means waiting years to buy a home, but that’s not always true. If you’ve completed a Chapter 13 bankruptcy, you can often qualify for a mortgage much sooner than you might think.

FHA Loans

You could potentially qualify for an FHA loan soon after finishing your Chapter 13 repayment plan, as long as you’ve made all your payments on time and received court approval. Typically, if you’ve completed your plan, you may qualify within a year after discharge.

Conventional Loans

You can also use a conventional loan, but it might just take longer than usual. Usually, conventional lenders require a waiting period of 2-4 years after your Chapter 13 bankruptcy is discharged before they’ll approve it.

Each lender has their own rules, so it pays to shop around.

Steps to Improve Your Chances of Getting a Mortgage After Chapter 13

To speed up the process and give you the best chance for success, you’ll still need to take specific steps to rebuild your credit and demonstrate financial stability. Here’s how to prepare:

1. Rebuild Your Credit

Right after your Chapter 13 discharge, begin rebuilding your credit. For example, open a secured credit card, use it responsibly, and always pay your bills on time. Each timely payment helps raise your credit score.

To help, we’ve published a free report all about rebuilding your credit to an A rating, even after bankruptcy.

2. Check Your Credit Report

After bankruptcy, make sure your credit report accurately reflects your debts as “discharged.” Fixing errors on your credit report can significantly boost your credit score and improve your chances of getting approved for a mortgage.

3. Save for a Down Payment

The more money you can put down, the better your chances of getting approved. FHA loans require as little as 3.5% down, but saving more can show lenders you’re financially responsible and reduce your interest rate.

4. Maintain a Steady Income, If Possible

Lenders want to see stability. So keeping a steady job and consistent income for at least two years before applying can really improve your chances of approval.

5. Get Pre-Approved

Before you start house-hunting, talk to lenders and get pre-approved for a mortgage. A pre-approval lets you know exactly how much you can afford, and it proves to sellers you’re serious.

Explaining Your Bankruptcy

A lot of people feel ashamed about their need to file bankruptcy. But being upfront and honest about your situation—and how you’ve improved your finances since—can go a long way.

When applying for a mortgage, be prepared to explain why you filed for Chapter 13 bankruptcy. Lenders will appreciate hearing about the steps you’ve taken to avoid future financial troubles.

Life After Bankruptcy Free Report

There’s actually a lot you can do after bankruptcy to improve your life, and getting out of debt is a critical first step. To help you understand your options, we’ve written a free report called Life After Bankruptcy.

In this guide—one of our most popular—we outline how to rebuild a better financial future after you’ve filed. That includes getting a new home, buying a car, navigating the job market, and more. With our help, you can set yourself up for success and get the most out of your bankruptcy.

Working With Our Experienced Attorneys

Working with an experienced bankruptcy attorney doesn’t just help during your bankruptcy case—it can also help afterward. We can advise you on how to rebuild your credit and speak with potential lenders.

Remember, bankruptcy is designed to give you a fresh start. Homeownership after Chapter 13 bankruptcy isn’t just possible; with the right steps, it can become a reality.

If you have questions about buying a home after bankruptcy, contact us today for a free consultation. We’re here to help you rebuild and move forward with confidence.