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Getting a Mortgage after Bankruptcy

Filing for bankruptcy may save some of your property, but it’s one of the most financially damaging decisions a person can ever make. There are alternative measures you can take to avoid bankruptcy and protect your credit rating.

last updated Sunday, July 13, 2025
#Mortgage After Bankruptcy #Timely Payments



by John Burson    
Getting a Mortgage after Bankruptcy

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Sometimes, bankruptcy may be your only play. In that case, be prepared to be denied access to loans/mortgages by lenders for the next 7-10 years, when bankruptcy records remain on your credit report.

If you ever want to get a mortgage, you must wait until your bankruptcy has been discharged. It’s only then that you can start to repair the damage done to your credit score. Most banks will still deny a two-year mortgage after your bankruptcy has been discharged. Here are a few tips to help you get a mortgage after bankruptcy:

Timely Payments

Ensure that any line of credit remains open and make timely payments to avoid any penalties or fees. If you have an auto loan, make sure to pay on time. Paying your open lines of credit on time is the best way to rebuild your credit score.

Get New Credit

You need a credit card on your credit report to get a mortgage. You will not be able to obtain a credit card immediately after bankruptcy. You can, however, get a secured credit card. You will be required to open a savings account and make a deposit as security for the card. You cannot exceed the amount of your initial deposit. Offers from credit card companies will begin to arrive after 6-12 months of making timely payments.

Start Saving For a Down Payment

If your credit record is still poor, it's best to start saving. Making a down payment can help you secure a mortgage. You may also get a mortgage in the form of a hard money loan, but you must have at least a 30 percent down payment to qualify for a hard money mortgage.

Consider an FHA Loan

It will be hard to qualify for a mortgage with a less-than-stellar credit score. Fortunately, other mortgage products are available for individuals with low credit scores. One of them is the FHA loan. FHA is a government-funded loan program that requires a small down payment (3.5 percent) and is comparable to a traditional loan.

 
 
 

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