If you have filed bankruptcy in the past and are looking to get a mortgage there are a few things you should understand.
The days of getting a mortgage for bankruptcy have changed quite a bit.
Before the mortgage meltdown it wasn't unheard of for you to be able to get approved for a zero down mortgage as little as one day after your discharge! Boy how things have changed.
Currently in order to be approved for an FHA mortgage you will need to have your bankruptcy discharged two years prior to your loan application.
A conventional mortgage requires five years from discharge date now.
Waiting the two or even five years before you apply for a mortgage is just part of the picture.
You will need to make sure that your finances and credit are in order.
This is important to understand as if you do nothing after filing bankruptcy and then apply for a mortgage you might be shocked to find out that your credit scores are still terrible and your credit reports are choke full of errors.
The first step in your mortgage for bankruptcy plan would be to review your credit reports once your bankruptcy has been discharged.
You will be shocked at what you will find.
More than likely you will see tons of errors.
What happens is after you file bankruptcy on a creditor they usually will not go back to the credit bureaus and update the status of your accounts.
What I suggest you do is hire a professional credit repair firm to go through your credit reports and fix all the errors.
Amazingly enough most of the items will simply go away.
Your credit scores will start to improve almost immediately.
This is just the first step of your mortgage for bankruptcy action plan though.
Your next step will be to establish new positive credit.
You should apply for bankruptcy friendly credit cards.
The positive history you will establish along with the removal of your old negative credit accounts is one-two punch to your low credit scores.
By the time your two year period for FHA or five year period for Conventional mortgages is over, your credit will be in tip top shape.
I have seen people with 750 credit scores in as little as 18 months after filing bankruptcy.
That is more than enough to qualify for a great mortgage rate with good terms.
Terms that will hopefully not put you in a bad financial situation that leads to bankruptcy again.
I will leave you with a word of caution.
It is possible to remove your bankruptcies from your credit reports before your two year period is up.
However, when you apply for a mortgage the lender will ask you if you have ever filed bankruptcy and if so when? Lying on a mortgage application is mortgage fraud.
I strongly suggest not doing this as you do not want that skeleton in your closet.