You likely understand that if you choose to seek bankruptcy protection in Des Moines, that decision will likely take a heavy toll on your credit profile. This may be a consequence that you are willing to accept if bankruptcy appears to be your best option at avoiding having to sink further and further into debt due to creditor actions. Yet once your bankruptcy case has been discharged and you begin the process of re-establishing yourself financially, you will inevitably begin to inquire as to your ability to engage in significant financial transactions again (such as taking out a home loan). The question then becomes how long after bankruptcy must you wait before applying for a mortgage?
According to LendingTree.com, the time required to wait before applying for a loan through traditional lending programs is as follows:
- Conventional: 4 years for Chapter 7, 2-4 years for Chapter 13
- FHA: 2 years for Chapter 7, 1 year for Chapter 13
- VA: 2 years for Chapter 7, 1 year for Chapter 13
- USDA: 3 years for Chapter 7, 1 year for Chapter 13
Keep in mind that these are not official standards; you may be able to qualify sooner (or you may even have to wait longer) depending on your circumstances.
Your desire to quickly get into a home is understandable, yet you also want to ensure that you avoid any of the financial pitfalls that placed you in the position of needing to file for bankruptcy in the first place. A lender may offer you a mortgage soon after your bankruptcy, yet it may come with an insanely high interest rate. Thus, you could end up paying much more just for the right to buy a home. Waiting until you are more likely to get a good rate may by the better way to go. It also gives you more time to save for your down payment.