Is a Mortgage After Bankruptcy Possible?

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Is a Mortgage After Bankruptcy Possible?

There are many misconceptions about life after bankruptcy particularly the notion that bankruptcy is a death sentence to obtain future credit and/or loans. After all, if someone has filed for bankruptcy, why would any company trust them with new credit and/or loans?

Just because you had financial problems in the past does not mean that you can’t build a great financial future. The government realizes this, and it’s exactly why bankruptcy protection exists in the first place. For many people, a brand new start without the crushing burden of debt is just what they need to get back on their feet and achieve financial stability. Part of that stability could well mean finally buying your own home.

Start Working On Your Credit Score

It is absolutely true that your credit score takes a big hit when you file for bankruptcy. But, like any damaged structure, you can rebuild it. Start right away by taking out a credit card and keeping its balance paid off every single month. If you can show good financial sense and the ability to pay your debts consistently, your credit score will slowly but surely rise. The higher it rises, the more chance you will have to get approved for a mortgage.

Assistance Programs

Besides offering bankruptcy protection, the government has several other programs designed to help people realize their home ownership dreams. Through the Federal Housing Administration (“FHA") Program, the government will back up your loan, promising to foot the bill if you become unable to. These loans also usually carry a relatively low down payment requirement, which is perfect for people who haven’t had much time to save money.

A simpler assistance program is the co-sign system. A family member or close friend can guarantee the repayment of your loan, making a bank more comfortable with extending the loan to someone with a less than perfect credit history.

Basic Financial Sense

The best thing you can do for your mortgage chances is simply to exercise good money management. Don’t take out multiple loans that you don’t need, or a mortgage lender will get very nervous about putting yet another burden on your budget. Make sure that the mortgage payment you are facing is really workable within your income scale. A professional counselor can help you with these questions and get your home ownership off to a great start—even after bankruptcy.

The Law Office of Julio E. Portilla P.C., is always available to answer your questions. Feel free to contact us at:

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