How to Buy a Home After Bankruptcy

Overview
For most families, bankruptcy and home ownership don't mix. Many individuals believe that declaring bankruptcy erases the possibility for home ownership for many years after the fact. This is far from the truth. It is much easier than you might think to get a home loan, even after a bankruptcy, by following a few simple steps.
Step 1
Check your credit. Verify that all debts included in your bankruptcy have been discharged, and obtain a copy of the discharge letter from the courthouse.
Step 2
Save some money. Prior to applying for a loan, consider how much you can afford paying on a monthly basis, and expect to have a minimum down payment of 3 percent for a home purchase.
Step 3
Open new trade lines of credit. Consider opening up a secured credit card, but pay it off completely each month. This will help to build your credit over six months and put you in a position to own a home in the next year.
Step 4
Document alternative credit line sources like rent payments and utility bills. This will show a bank that you are paying your bills on time.
Step 5
Apply for a mortgage with a mortgage loan officer. Bring your bankruptcy discharge letter with you for the application process, along with your proof of employment and bank statements to verify that you have saved up money toward a down payment. Providing that you have worked hard to make timely payments for at least 12 months after a bankruptcy discharge, you will be eligible for a home loan, and are now ready to complete a home purchase.
skill
2
ingredient
Credit report

Discharge letter

ingredients
Credit report
ingredients
Discharge letter
tip
Open up at least two new trade lines of credit after bankruptcy, but pay them off each month.
tips
Open up at least two new trade lines of credit after bankruptcy, but pay them off each month.
keyword
buy home after bankruptcy purchase
keywords
buy
keywords
home
keywords
after
keywords
bankruptcy
keywords
purchase

Resources
reference
Bankruptcy and Home Loans