Getting a mortgage after bankruptcy requires time, a credit rebuilding plan, and patience. There are banks that will loan money after two years but the rates may be very high. Most banks require three years but also want to see that you have put effort into rebuilding your credit. Obviously, if you are late on some of your bills post-bankruptcy, banks will be less likely to give you a mortgage. But even if you’ve done nothing it is still a negative. You haven’t shown the bank you are willing to make the effort to rebuild your credit, so why would they loan you the money for a house?
If getting a mortgage after bankruptcy is your primary goal, and it should be, then you have to make sure that the debt you take on post bankruptcy does not negatively impact the way banks view your finances. Banks will look at your credit worthiness, your credit score, your debt to income ratio and other factor in determining your eligibility.
You may think, for example, that getting a car loan will help you build your credit. Well, it may, but it will hurt you when it comes to getting a mortgage. The monthly payment for that vehicle will be included in your debt to income ratio and may prevent you from getting a mortgage that you would otherwise qualify for. This would affect you getting a mortgage regardless, but obviously you must be more diligent in your decisions post bankruptcy, as it’s not just about your credit score, but your credit worthiness, which is a result of your decisions.
Not paying a bill on time is always bad for your credit, but it is devastating post bankruptcy and will exponentially increase the time necessary to rebuild your credit. Bankruptcy is an opportunity to start over. Develop a record management system, stay on top of your bills, implement a plan, and make decisions based on your goals.
Implementing this strategy will result in obtaining a mortgage in time. But remember, you must also have a plan for financial security prior to getting your mortgage. You do not want to over-extend yourself and not be able to pay your bills post-bankruptcy resulting in being in the same position as before. You cannot file bankruptcy again with that 10 year period. You need to rebuild your financial life properly.