Can I Be a Homeowner Again After Bankruptcy?

 Posted on December 11, 2024 in Bankruptcy

If you are serious about rebuilding credit after bankruptcy and have steady income, it is very possible to return to a position where buying a home is achievable. A lot of people who have been through a bankruptcy are able to secure a home loan as little as a few years later. There may be a waiting period before you can apply for certain types of home loans, but they are typically between two and four years. Bankruptcy exists to help people get out of insurmountable debt so that they can start again with a clean slate, not to make basic goals like home ownership impossible. A Boerne, TX bankruptcy attorney can help you plan for success after your bankruptcy.

The Waiting Period for Federally-Backed Loans 

If you are planning on using a federal program to obtain a home loan, there may be a brief waiting period. If you are using a VA loan or an FHA loan, the waiting period after a bankruptcy before you can apply for a loan is two years if you had a Chapter 7 bankruptcy.

You may be able to apply sooner for some types of loans if you had a Chapter 13 bankruptcy and have been making on-time payments. However, most people wait until the end of the repayment term. Chapter 13 repayment plans rarely leave the debtor with enough extra funds to go through the process of buying a home.

Securing a Private Home Loan After Bankruptcy 

Getting a mortgage through a finance agency or bank can be more challenging after a bankruptcy. You will normally need to wait at least four years before you can be approved for a home loan. It will be especially important to rebuild your credit before applying for a home loan this way.

Your bankruptcy may come up when you apply for a home loan, and may be a hurdle. If there were extenuating circumstances that led to your bankruptcy, like a serious illness that led to significant medical debt and prevented you from working for a period of time, this can help your case. Lenders generally understand that a bankruptcy can truly happen to anyone and will look to how you handled you finances after the bankruptcy. You are likely to succeed in securing a home loan if you have the income needed to make monthly payments and have improved your credit.

Contact a Boerne, TX Bankruptcy Lawyer 

Law Offices of Chance M. McGhee can help you plan to achieve your financial goals after your bankruptcy. Experienced San Antonio, TX bankruptcy attorney Chance McGhee will strive to leave you in a good position to start again. Contact us at 210-342-3400 for a free consultation.