It is possible for people who have filed a Chapter 7, 11 or 13 bankruptcy to purchase a home at a future date. However, you do have to have the means to demonstrate that you are actually worthy of credit. As any bankruptcy attorney would tell you, a bankruptcy is not the same as a clean slate, a financial do-over if you like. At the same time, it isn’t a death sentence that means you will never again be able to get credit.
The majority of people dream of being able to own a home at some point in their life. A past bankruptcy does not necessarily have to stand in the way of realizing that dream. After bankruptcy, your creditors have released your debt to them, meaning you can effectively rebuild yourself. There are very few people who would be able to purchase a home without a mortgage. Those who have been bankrupted have even less chance of doing so. Generally, lenders are happy to work with those who have been bankrupt in the past, so long as they can prove they are a rehabilitated character. The Fair Isaacs scoring system is most commonly used for this. In terms of determining interest rates, there is no difference between those who have and those who have not filed for bankruptcy in the past. You can expect a low FAIR Isaacs score to mean a high interest rate. However, those who can make a good down payment will find that their interest rate drops again as well. If you can get someone to cosign your mortgage, the interest rate will drop down further. Other than that, it is about taking the time to rebuild the FAIR Isaacs score.
Your bankruptcy will have a negative effect on your credit score for two years. After these two years, finding a mortgage will be much easier again. You will also benefit from the fact that the mortgage market is highly competitive again, meaning that there are even lenders out there who specialize in providing mortgages to those with past bankruptcy filings. You do, however, have to be certain that you are no longer facing the same problems that made you go bankrupt in the first place. You do have to make sure you know what you are doing and have the money available for the associated costs of buying a house. Do also make sure you have a pre-approval letter from your lender before you put an offer in on a house. By doing that, you won’t have to face the disappointment of having to retract the offer on your dream home.