The length of time it takes to qualify for a mortgage after a bankruptcy depends on the type of bankruptcy and the lender’s guidelines.
Chapter 7 bankruptcy: After a Chapter 7 bankruptcy, a borrower must typically wait 2-4 years from the date of discharge to qualify for a conventional mortgage loan. Some lenders may offer a loan to a borrower who has filed for a Chapter 7 bankruptcy as soon as they have received a discharge, but their terms and interest rate may be higher.
Chapter 13 bankruptcy: After a Chapter 13 bankruptcy, a borrower must typically wait 2-4 years from the date of discharge or from the date of completion of the repayment plan to qualify for a conventional mortgage loan. Some lenders may offer a loan to a borrower who has filed for a Chapter 13 bankruptcy as soon as they have received a discharge or completed the repayment plan, but their terms and interest rate may be higher.
FHA loans: The Federal Housing Administration (FHA) has more lenient guidelines for borrowers who have filed for bankruptcy. A borrower can typically qualify for an FHA loan just two years after a Chapter 7 bankruptcy discharge, and one year after a Chapter 13 discharge, as long as they have successfully completed the repayment plan and the bankruptcy was not caused by fraud or intentional misrepresentation.
It’s important to note that bankruptcy laws vary by state and it’s best to check with a local attorney or housing counselor to get a better understanding of the laws in your state. Additionally, Lenders have their own guidelines and policies, so it’s best to check with different lenders to see what their specific requirements are.