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Buying a Home

February 1, 2021

To buy a home you need to have several things in place.  Pre-approval for a mortgage is always a good place to start, you will need a good credit rating, and a down-payment equal to at least 5% of the value of the property.

If you had a bankruptcy on your credit report you will have some challenges qualifying for mortgage financing, particularly if it was a fairly recent event.  The more time between your discharge from bankruptcy and your mortgage application the better – generally mortgage brokers say they like to see at least two years.

If you have a lot of delinquencies on your credit report you may actually be in far worse shape, when it comes to a future of home ownership, than a person who has finished a bankruptcy.  Delinquent accounts are reported until several years after the delinquency has been resolved or the debt has been settled.  Delinquent accounts also take a long time to get paid off if you have the means.

Now, this is not to suggest that going bankrupt improves your chances of qualifying for a mortgage, but the point is if you have a really bad credit history a bankruptcy can be a great first step to clean up old debts and get you into a position where you can work on re-establishing credit.