Even though filing for bankruptcy can feel like a devastating blow and will affect your credit and FICO score, it doesn’t mean that you will never be a homeowner, or even wait 10 years before you can qualify. Many people who have had a bankruptcy have been able to get a mortgage, although it is usually at a higher rate than somebody qualifying who has not had one.

While credit card companies care more about what happened before you filed for bankruptcy, mortgage lenders are more interested in your credit recovery and what you have done since you filed.

Recovery doesn’t happen overnight, but here are some tips for when you apply for a mortgage with a bankruptcy. 


Give explanations. Mortgage lenders are unable to ignore the bankruptcy since they will need to know the cause of the filing, to see if the situation is likely to happen again. Chances of being qualified are better if caused by extenuating circumstances or single events such as the loss of a job, a death in the family rather than over spending on credit cards.

If the bankruptcy is the result of a one-time event, it is important to show your advisor paperwork describing the incident, such as a death certificate or layoff notice. You will also need the court documents to indicate when the bankruptcy was filed. 


Demonstrate good money habits now. Rather than swearing off credit all together, it is important to rebuild your credit. Getting a secured credit card can help increase your score since you will not be able to over spend with it. A small loan for furniture, a car or major appliance can help demonstrate that you are able to pay on time. Make sure to make all other payments on time, such as utility bills, telephone bills, etc. While thing won’t be turned around in a year, you will be on the right track for your credit to recover. 

Dispute any credit report errors. You don’t need your troubled credit history compounded with errors on your credit report. You can check your credit score for free from, or you can get a copy of your report from each of the major credit reporting agencies: Equifax, Experian and TransUnion. If there are any errors on your report, you need to report them to the reporting agency in writing. Make sure to include the information you believe is incorrect and request that it is either corrected or deleted from the report. 


Save your money. When applying for a mortgage after a bankruptcy, it is easier to qualify when you have a larger down payment saved up to compensate for the lower credit score. 

Live within your means. After a bankruptcy, it is important to live within your means. Look for a smaller home that you can easily afford to keep your payments low.