Have you filed for bankruptcy and are wondering if you will ever be able to own a home again? Here is what you need to know to get a mortgage loan after bankruptcy!

If you have filed for bankruptcy, you will probably know that life is going to be different for a while. The good news is that with some time and effort, your life can and will return to normal. While it may seem like it will never happen, you can even get a mortgage loan after bankruptcy. Here is what you need to know to make that happen!

Begin Repairing Credit Immediately

Credit may be the last thing you want to think about once your bankruptcy is discharged, but it is something you need to focus on right away. Getting your finances back on track is going to take time, and the longer you push it off the further away you are from getting a mortgage loan after bankruptcy.

As soon as you receive your bankruptcy discharge, you will need to get a copy of your credit file from each of the three credit bureaus. Review it carefully and make sure that all of the accounts that were included in your bankruptcy are reflecting accurately. Chances are some of your creditors have not updated your credit file to reflect that the accounts were discharged in your bankruptcy.

Having accounts that are reporting as open and currently past due can drag your score down even further than it should be. You will want to get this corrected immediately!

Establishing New Credit

The next thing you will want to do is establish some new accounts to show future lenders that you have the ability to make your payments on time. The first place to start is with a secured credit card. Secured credit cards are also sometimes called guaranteed credit cards because their approval is based on a deposit that you place with the lender, not your credit history. Since the only reason to get a secured credit card is to reestablish your credit history, make sure that that card you get reports to each of the three credit bureaus.

You should also see if your local bank will issue you a loan secured by a certificate of deposit. A CD loan is usually very easy to get and having bank credit will go a long way towards credit repair!

After six months, you should start researching unsecured credit cards that are designed for people with bad credit. Your credit limit is likely to be low at first, but as long as you manage yourself well you should expect an increase over time.

How Much is Too Much?

A word of caution - you don’t want to go out and open 10 new accounts! Not only will so many new accounts drag your credit score down, there is too much risk of you getting into financial trouble again. Ideally, you want four accounts that are active. A good strategy is to pay the accounts off in full each month. Remember - you are re-establishing a credit history NOT getting into debt.

Documenting Income

If your ultimate goal is to get a mortgage, something you need to think about now is documenting your income. This is easy if you are an employee, but can be a challenge for those who are self employed. Since stated income loans are a thing of the past, this is something you need to work on at least two years prior to mortgage application.

Down Payment

You will also need to save up a down payment. This shouldn’t be that challenging since all of your debts were just discharged in your bankruptcy. Get on a disciplined schedule of saving now!