Buying a Home Post Bankruptcy

Myth: Bankruptcy makes it impossible for you to take out a loan. 

Truth: Bankruptcy makes it a little more challenging to get a loan. 

Have you been dreaming about finally buying your home and settling down, but think it is just not possible with that past bankruptcy looming over your head? While bankruptcy is an apparent setback and can leave some people feeling down on their luck, it does not mean you have to give up on ever having a healthy financial situation. 

Once a judge has discharged your bankruptcy, you can get approved and take out a loan in your name. Make sure to do some hard and dedicated work to fix your credit and finances, after that it is entirely reasonable to aim for taking out a mortgage loan to buy yourself a home. 

Fixing Your Finances 

Now that a judge has discharged your bankruptcy, you are in a position to focus on improving your finances to make it possible to get approved for a mortgage loan. Lenders may still see that you have filed for bankruptcy in the past, but that is not the only thing they consider when approve or deny a loan. 

Some aspects of your finances they will consider are: 

  • Credit History and Score 
  • Current Debt to Income Ratio 
  • Steady Income 
  • A Down-Payment (Your Savings) 

Even though you have that bankruptcy glaring back at you, lenders will consider you if the factors listed above are reflecting you positively. 

So, what does this mean that you have to focus on getting approved for a loan? Here’s a list of some critical aspects to consider when fixing and stabilizing your finances: 

  1. Your credit score.  Make sure to continue to check on its status and make decisions that will positively impact your score. 
  2. Credit cards/lines. While you do not want to take on more than you can afford, taking out small amounts on credit and steadily paying them off will boost your overall credit score. 
  3. Debt. Check on the level of your debt and make sure to focus on paying that off if it is significant enough to impact your debt-to-income ratio negatively. 
  4. Budget. Keep track of your finances and save money to ensure your finances reflect that you can pay a mortgage. 

Getting the Right Mortgage 

Once you believe your finances are in the right place for you to get approved for a loan, do some research into mortgage lenders. While many people do ample research on their dream home, very few consider the lender’s role. 

When assessing lenders, compare their interest rates, consider additional fees that come with purchasing property, and compare them with your current financial situation. 


Bankruptcy is not the end of the line for your financial stability. Once it has come and gone, focusing on your finances and credit can get you to a healthy financial situation. As long as you are always working to improve your finances, homeownership is possible after bankruptcy.

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