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Buying a Home After Bankruptcy - Quicken Loans Zing Blog*This post was published in 2005. Bankruptcy guidelines have changed greatly since then. For more information, check out the government’s website here

The good news: Having a bankruptcy on your credit report does not mean you can’t buy a home. Believe it or not, those who have gone through bankruptcy are actually encouraged to find ways to build credit by taking on debt.

The bad news is that debt will be closely scrutinized, come in smaller amounts, and have higher interest rates because lenders will consider them to be higher-risk borrowers. But these downsides shouldn’t discourage those with poor credit history from investigating their home loan options. The responsible use of credit is the only way up from a bankruptcy filing.

How Bankruptcy Affects Your Credit Rating

Bankruptcy can provide relief to people in dire financial straits by releasing them from the obligation to repay their debts. It’s a drastic move for anyone because a bankruptcy will stay on a person’s credit rating for up to 10 years, effectively acting like a warning flag to anyone considering lending that person money or a line of credit.

In order to mitigate the risk of providing that person a loan, the lender will charge higher interest rates than they normally would. For instance, an auto loan that might ordinarily carry six percent interest could come with an interest rate of eight percent or higher. But, as time passes and small loans and credit card balances are paid off on time, the bankruptcy filing becomes less and less significant to a lender.

Rebuilding Good Credit After Bankruptcy

Establishing good credit after bankruptcy is essential. The following will help recent bankruptcy filers regain their financial strength:

  • Pay bills on time. This is the single best thing bankruptcy filers can do to build up their credit rating.
  • Acquire and use a secured or unsecured credit card. Just don’t charge any more than you can afford to pay off each month.
  • Read your credit report. Errors are possible, and keeping tabs on your progress will help you stay focused on the goal of rebuilding after bankruptcy.

When and How to Find a Home Loan

Understandably, mortgage companies want some form of reassurance that the borrower is on a safe and responsible financial track. Many lenders prefer to see three things when considering loaning money to someone following a bankruptcy:

  • A two-year stretch of on-time bill payments
  • A down payment
  • A steady income

The one non-negotiable item on the list is a reliable income. The other two – two spotless years of credit and a down payment – aren’t quite set in stone. Some lenders will be willing to provide a loan sooner than two years if there is evidence of responsible bill payment on a car or secured credit card plus reliable income.

Likewise, with a steady work history and a down payment (even a small one), it’s not impossible for someone just coming out of bankruptcy to secure 100-percent coverage on a home loan.


Finding a reputable lender willing to loan a home’s total value to someone just beginning the process of rebuilding their credit, and with an on-again off-again employment situation, is a tall order, and probably not a good idea for the would-be borrower. Post-bankruptcy borrowing should be undertaken at a slow pace and with an eye toward the future. With proof of responsible borrowing and spending, home ownership won’t be far off.

Have any questions? Talk to a Home Loan Expert today!

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This Post Has 316 Comments

  1. Hi, I filed Chapter 7 in June 2009, discharged September 2009. I have three unsecured credit cards I have paid off every month. I purchased a house with a WRAP mortgage that has a ballon coming due in August. I have been remodeling and would hate to lose it, but I’m afraid to appply for a loan because if I get turned down I’m afraid it will negatively affect my credit. I’ve got to do something soon, because I have invested a lot of money and will lose it if I don’t. In the mean time, I got transferred but my (grown) kids are living in the house. Will that affect my ability to borrow. I go home about once a month. ?

    1. HI Kathy, I have forwarded your inquiry to one of our home loan experts who will contact you soon to find out more about your situation and see if we can be of assistance, thank you!

  2. Our chapter 7 bankruptcy was dismissed in 11/11. I hear we have to wait another year before we can approach a mortgage broker. We didnt file bankruptcy on our home, we have continued to pay thruout this ordeal and have never missed a payment. We had to feel due to medical reasons (my husband has cancer). Is there anything we can do or are there exceptions to the rule? /when we sell our current home we would hopefully make a profit and have that money to use towards the purchase of another home. We are wanting to downsize in home so that should be a plus in the amount of money needed for loan. I quess my questions are, is do we have to wait another year, is there exceptions when bankruptcy are based on medical reasons, and if you are selling a home at a hgiher price than what you are are wanting to purchase does that count. I have a steady job of 30 years and again, the home was never involved in the bankruptcy. it was continually paid each month without fail.

    1. Hi Judy, thanks for reaching out to us, I have forwarded your request to one of our home loan experts who will contact you soon to learn more about your situation and see if we can be of assistance. thanks

  3. I filed bankruptcy on August 2011, and looking for a home loan, I have living at my apt for the last 5 year never been late paying 981 per month, I am working on getting a down payment, can I get help?

    1. Hi Cameilia

      We’ll have a mortgage banker get in touch with you shortly to discuss your situation.



    1. Hi Jeanette, thanks for contacting us, I have forwarded your request to one of our home loan experts who will contact you shortly.

  4. Hi, It’s coming up on a year since mine and my husbands bankruptcy. Work history is good, and with the same company for years. We have a car we’ve been paying on for 7mo. never late and we have a major credit card that has never been late. How close are we to buying a home? We really want out of renting.

    1. Hi Amy, Thanks for reaching out to Quicken Loans®, I’ve forwarded your inquiry to one of our home loan experts who will contact you to see if we can be of assistance, thanks!

  5. Hello,

    My husband and I are looking for a company to get a mortgage loan, and just like the other people here my husband has a bankruptcy. It has been over two years, we both work and together make about 80K a year. The money isn’t the issue, we just can’t get approved for a home loan. Can you please direct us in the right location to find a company that would help us get into our first home. Thanks. Please contact me.

    1. Hi Candice, Thanks for reaching out to Quicken Loans®. I’m forwarding your request to one of our home loan experts who will contact you shortly to see if we can be of assistance. Have a great day.

  6. I have the same stories as many of theses people and would love to buy the house we are living in but need to know what steps to take to get financed please help

    1. Hi Justin

      We’ll get you in touch with one of our Mortgage Bankers who will help you figure out what you need to do. Thanks for asking!

  7. Hello,

    We just had our bankruptcy discharged a few weeks ago and we are in a home that we have 6 months left on the lease before we are required to purchase the home. My husband has had a job for over 10 years and I have had a part time job and full time school for the last 2 years. I just started about a month ago at a full time position on top of the part time I already had. My credit score is 586 and his is about 530. Is there a chance of us getting a mortgage with this info? We have no debt except for student loans. The house is about $110k and we will have a down payment of about 10% in the next two months. Thank you!

    1. Hi Debbie, thanks for reaching out to Quicken Loans®, I have shared your comment with one of our top home loan experts who will contact you to learn more about your situation. Thanks and have a great day.

  8. Hi,

    I have been discharged from bankruptcy for nearly 2 years now. I have a good deposit and have been in employment for over 5 years with a good wage. I also have been building up my credit with a credit card.
    Last year me and my wife applied for a mortgage with Halifax. We were approved through all the stages until the last. Do you know if there is anyone out there that would now lend to us? We have been paying rent at £1000 per month for 18 months now, its heart breaking when its not to pay your own mortgage.
    Any help and advice would be much appreciated.

    1. Hi James, Thanks for reaching out to Quicken Loans®. Unfortunately, if you are located in the UK we would not be able to help you. You may want to contact a local lender in your area.

  9. Thanks for your thoughts. One thing really noticed is banks in addition to financial institutions understand the spending behavior of consumers and understand that plenty of people max out their credit cards around the holidays. They correctly take advantage of that fact and start flooding your current inbox and snail-mail box using hundreds of no-interest APR credit card offers shortly when the holiday season concludes. Knowing that for anyone who is like 98% of the American community, you’ll jump at the one opportunity to consolidate consumer credit card debt and move balances for 0 APR credit cards.

  10. Hi there! I lost my job back in November of 2008. couldn’t find another job until May of 2011. Have a great job now and my husband has been with the same place for 10 years now. We had no choice but to file bankruptcy in March of 2010 and were discharged in August of 2010. We also included our conventional mortgage in the bankruptcy and decided to stop paying soon after discharge. We now need to be out of our house at the end of April. We have reestablished good credit since the discharge and have not been late.

    My question is, is there a chance we could qualify for an FHA loan after our 2 year discharge? Is there a chance we could get a loan with a parent cosigning?

    It’s confusing with all the information out there and i had a friend in the exact same situation who was able to get a VA loan 2 years out of their discharge that included their home as well.

    Any advice is appreciated. Thank you!

    1. Hi Heather, I forwarded your inquiry to one of our home loan experts who will contact you shortly. Thanks for reaching out to Quicken Loans®!

  11. I have read there is a difference in the waiting period to refinancing after a Chapter 13 vs a Chapter 7 bankruptcy. I understand the two year period after Chapter 7, but what is the waiting period after a Chapter 13? My mortgage was not included in the plan and it has never been late in the five and a half years since inception. I will not be discharged until the end of 2013. What kind of rates could I expect if I were doing it today?

    1. Hi, thanks for reaching out to Quicken Loans®. I have forwarded your message to one of our home loan experts who will contact you with more information. Thanks and have a great day!

  12. My wife and I were discharged from a chapter 7 bankruptcy in February of 2011 due to a failed business. Since then we have moved to a different state and after a short period of hard times we now both have solid jobs and a good income. We current live about an hour from work and

    1. Hi Joel, thanks for reaching out to Quicken Loans®, it looks like your message got cut off. I can connect you with one of our home loan experts who may be able to assist you. Thanks!

  13. We have less than a year left on our chapter 13. We are trying to find a loan to use the equity in our mobile home & land to pay off bankruptcy. Is there any companies that will help with this?

    1. Hi, unfortunately we are unable to provide assistance on a mobile home and land. Perhaps you could contact your local bank and see if there are lenders in your area who specialize in mobile home lending. Thanks for reaching out to Quicken Loans® and best of luck to you.

    1. Hi Ella, thanks for your question. There are specific guidelines that must be met, including the length of time that needs to pass after the discharge of the bankruptcy. However, I am forwarding your email to one of our home loan experts who will reach out to you and give you more information. Thanks for reaching out to Quicken Loans® and have a great day!

  14. My husband and I filed chapter 7 in june 2010 and we are looking to buy. We have 3 kids and I had to leave my job at the army barricks due to such high risk pregnancies with my kids. My husband has been a professional firefighter at the same station for 6 years now. We have several lines of income since he works full and part time. We just don’t know where to start?!

    1. Hi Jennifer, thanks for reaching out to Quicken Loans®. I’m going to share your information with one of our home loan experts who will contact you and see if we can be of assistance. If there’s anything else I can help you with, please let me know. Thanks and have a great day!

  15. My husband and I have to kids and one on the way, we really wanna buy and don’t no what to do because everyone gives us all kinds of info. We filled a chapter 7 in oct. 2010 we have several line of credit , when can and who can we get a loan from??? Please help us….

    1. Hi Dee, thanks for reaching out to Quicken Loans®. We will have one of our home loan experts reach out to you and see if there’s a way we can assist you. We’ll be in touch soon!

  16. I am recently discharged from a bankruptcy as of 6/2011 I have a secured credit card that’s been paid on time for 6 months and a decent down payment for a home. I’ve been on my job for over 2 years and make a decent wage would I be able to be approved for a home loan?

  17. We would like to know of any lenders in todays market for post Chap 13, we have almost 3 yrs of perfect rent (quite more than house payment) & have secured cc in both our names to rebuild credit. We both have VA benefits available as well and downpayment. We have 35yrs employment history w/ military retire pay & salary from govt job. Are there options for us? Both our kids are Veterans as well and will be coming back to our state from Iraq tours to go to College. We want to have a home they can come home to….Please help….

    1. Hi, thanks for reaching out to us, we will have one of our Home Loan Experts contact you as soon as possible to see if we can assist you.

  18. Im trying to get some information for my mom. She filed chapter 13 back in Feb. of 2005. She repaid her debt and the bankruptcy was completed in Apr 2010 but she did not get the official letter until July 2010. She is looking to purchase a new home. Here current home was not included in the bankruptcy. Credit score is in the 665-675 range with steady income approx. 100,000/year. Are there any financing option for her at this time?


  19. I read stories like this but have so far found not one lender even willing to talk about a home loan. 12 months out of chapter 7 with 12 months of solid payments and 3 years of perfect rental history and 65,000 a year income. Same job for 4 years. Any ideas on a lender that will help?

  20. After filing for bankruptcy, it was hard getting any loans, i finally settled on just staying in an apartment for a while and am now doing installment loans on a brand new car just to build up my credit again.

  21. Hello,

    Is there a way to determine approximately how much of a home loan I can qualify for without paying my bank to review my information? Bankruptcy cleared approx 2 years ago and I had a glowing credit score before that. I’m hoping to take advantage of these drastically low home prices and become a first time buyer. Thanks!

  22. I filed chapter 7 bankruptcy in feb of 2010 I was discharged in 6/2010. I bought a car in 6/2010 and I have been paying my creditors on time since. I have very steady income and I have been renting a home for the last three years for the amount of 762.00 monthly!! I really would like to purchase a home…Need help Please!!

    1. Hi Aisha,

      Unfortunately we have to wait 2 years after a bankruptcy is discharged before we can consider you for financing. Thanks for checking and please keep us mind for the future!

  23. I will be getting my discharge papers from the court in a few months. I currently in a house that is worth less than what i own. I dont want to reafirm this mortgage. I have my eye on a home is it possible to get a mortgage on a new home, My income ratio to debt is very good. I have alot more cash flow now, Credit score is yet to be deturnmend.

    1. Hi Joe,

      Unfortunately we have to wait at least 2 years after a bankruptcy is discharged before we can consider you for financing. Good luck & please keep us in mind for the future!

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