Filing bankruptcy causes a huge hit to your credit, but the effects do not last forever. It may slow you down, though, if you have plans to buy a home.
According to the Mortgage Reports, you will usually need to wait at least two years before you can qualify for a mortgage to buy a home.
General waiting period
When you file Chapter 7, you can expect it will remain on your credit report for 10 years. Lenders will not give it as much weight, though, for the full 10 years. You can usually find lenders willing to offer you a loan after two years, but some will require you to wait four years or more.
Specific loan waiting periods
If you have a specific type of loan that you wish to qualify for, then you will want to know how long the waiting period is for that program. Your lender cannot change these minimum wait periods. The program administrator sets them.
FHA or first-time homebuyer loans have a two-year waiting period. VA or veterans loans are the same. A USDA loan, though, requires waiting three years. Conventional loans will often be more difficult, requiring a four-year waiting period.
Lenders can make you wait longer. These are only the minimums. So, keep that in mind. You may need to shop around if you feel you are ready to buy a home and keep running up against longer wait periods.
The waiting period will not begin until after the court discharges your case. For Chapter 7, that generally happens about four to six months after you file.
