People in Maryland may hesitate to file for bankruptcy. They may fear doing so will brand them as financially irresponsible for years to come. However, filing for bankruptcy does not deserve the negative stigma it has. It can be a viable and reasonable way to address overwhelming debt in a positive manner. Those who are going through bankruptcy may have many questions, including whether they can qualify for a mortgage post-bankruptcy.
The waiting period
While it is possible to obtain a mortgage post-bankruptcy, banks generally want to make sure that their customers are ready to be responsible homeowners before granting a mortgage. Therefore, there is often a waiting period of up to five years following the bankruptcy discharge. During this waiting period, it can help to make sure you pay any debts on time and in full, in order to ensure your credit record is clean.
Keep an eye on your credit report
Before seeking a mortgage, it is a good idea to check your credit report. Any debts discharged through the Chapter 7 or Chapter 13 bankruptcy process should be listed as “included in bankruptcy.” If not, you will want to have those fixed to avoid hurting your credit score.
It is possible post-bankruptcy to get pre-approved for a mortgage. However, you may need to provide your lender with an explanation about why you filed for bankruptcy and show proof that you now have good credit. While this can take time, pre-approval can be very helpful in securing a mortgage once you find the right home.
Learn more about bankruptcy
Filing for bankruptcy is often the best way for those drowning in unmanageable debt to clear their financial obligations and move forward on fresh footing. This post is for educational purposes only and does not contain legal advice.